AARoads Forum

As today as tax day, how do you file and pay?

As you may owe one entity and receive a refund from others, feel free to select more than one option.

It's a survey, not a secret government operation. No one will check up on your answers.

My tax situation is quite complicated, but I don't mind handling it. I work in New York but currently live in Indiana. This year, I had to file taxes in three states due to my relocations. Additionally, I own a small business, which allows me to write off many of my purchases and mileage. I received a $3,000 federal refund, owed $2,000 in New York state taxes because my employer does not withhold taxes for remote workers, and received a $1,000 refund from Kentucky.

I was keeping track of all my taxes in Intuit Self-Business, but that app is no longer supported (and has been garbage for about two years now), and its price has increased constantly. I've moved everything over to Hurdlr, which has mileage tracking built in.

Already filed. And already received a larger refund than expected due to filling out the "new" W4 wrong when I started this new gig last year. Doing a couple things around the house with it. So it's mostly already spent.

Because of some medical claims that I made when my HSA was maxed out, I ended up getting a refund. I would rather owe a little bit of money rather get a refund because it's essentially a interest-free loan to the government.

I owe every year, but thankfully, this year I owed $7k+ less than last year.

Our taxes are pretty easy, 2 salaried incomes, no other income, standard deductions. It's pretty easy to estimate how much I will owe for the year and adjust my withholding accordingly. I almost always end up owing or getting a refund < $100.

Quote from: NWI_Irish96 on April 15, 2025, 11:36:54 AMOur taxes are pretty easy, 2 salaried incomes, no other income, standard deductions. It's pretty easy to estimate how much I will owe for the year and adjust my withholding accordingly. I almost always end up owing or getting a refund < $100.

Despite both my wife and I claiming 0 and having an extra $50 pulled per pay check, I still couldn't whittle it down to $0.

I always owe because I don't take taxes out of my stock investments during the year.  It is just easier to take it out at the end of the year and only have to deal with it once.

Filed in early March. Surprised to get a larger refund than usual, but our living situation is a bit odd these days, so it's welcome.

I owed federal and got a refund from state. Guess which one gets processed faster.

Choice XX - push for repeal of 16A.

 :nod:

Mike

Both the feds and the state owed us, so I filed in early February and we had our refunds within ten days. Probably about the fastest refund processing I can ever recall.

I owed Fed and got a refund from the state. Had taxes prepared and forms sent a month ago. Got my state refund Friday. Feds are getting their money today via auto deduction from my bank account.

I file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Am I the only one with a refund for federal but had to pay for state? (The amount I owed to Massachusetts was $24, while my federal refund was three digits.)

As for which one gets accepted first: Massachusetts accepted exactly two hours after federal. Does two hours really make a difference?

My return looks pretty similar from year to year.  I do a pro-forma federal return early each year based on anticipated income (so I already know what my 2025 return is going to look like).  Then I keep an income spreadsheet continually updated during the year, a few minutes worth of work each month.  When there's a discrepancy toward the end of the year I increase or decrease the planned Roth IRA conversion to make the final total income more or less equal to the plan.

So, filing is a matter of making sure the final numbers reported to me match what I have on the spreadsheet, and transferring those numbers to the 1040 and related forms.  This takes under an hour.  For 2024, the bottom line was that I owed $10.  For that minimal amount, I paid at the time I e-filed in early February and the books were closed on 2024. 

I paid state income tax in California for many years.  As a Nevada resident now, filing a state return isn't something I particularly miss.

Quote from: hotdogPi on April 15, 2025, 01:10:47 PMAm I the only one with a refund for federal but had to pay for state? (The amount I owed to Massachusetts was $24, while my federal refund was three digits.)

I would say, "What is this state income tax you speak of? :-D", but having lived in California for 41 years, I know better. The lack of state income tax in Texas is made up by the higher than average property taxes which, along with mortgage interest, is at least deductible on Federal taxes.

At least it's not as bad as New Jersey...

Quote from: hotdogPi on April 15, 2025, 01:10:47 PMAm I the only one with a refund for federal but had to pay for state? (The amount I owed to Massachusetts was $24, while my federal refund was three digits.)

As for which one gets accepted first: Massachusetts accepted exactly two hours after federal. Does two hours really make a difference?

Last year I got a federal refund but was at $0 for state.

Quote from: hotdogPi on April 15, 2025, 01:10:47 PMAm I the only one with a refund for federal but had to pay for state?

Nope, that's normal for us the last couple of years.

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

I filed in February. Being unemployed for 5 months and then taking a new job with lower pay means a big refund. I also needed to file 2 state returns because I moved.

A big refund is not desirable. It's an interest free loan to the government

Quote from: seicer on April 15, 2025, 11:05:09 AMAdditionally, I own a small business, which allows me to write off many of my purchases and mileage.

I certainly hope those purchases and miles were for legitimate business purposes.

Quote from: kernals12 on April 15, 2025, 02:39:28 PMI certainly hope those purchases and miles were for legitimate business purposes.

yes, mother

Quote from: kernals12 on April 15, 2025, 02:27:45 PMA big refund is not desirable. It's an interest free loan to the government

Yes. I don't mind a small refund though. Better than paying.

Quote from: kernals12 on April 15, 2025, 02:39:28 PM

Quote from: seicer on April 15, 2025, 11:05:09 AMAdditionally, I own a small business, which allows me to write off many of my purchases and mileage.

I certainly hope those purchases and miles were for legitimate business purposes.

Sure.

Quote from: hotdogPi on April 15, 2025, 01:10:47 PMAm I the only one with a refund for federal but had to pay for state? (The amount I owed to Massachusetts was $24, while my federal refund was three digits.)

As for which one gets accepted first: Massachusetts accepted exactly two hours after federal. Does two hours really make a difference?

I used to be in that boat, my Mass one I owed a little or the refund was so small it was less than $10 and I just donated thru one of the worthy charities you can pick.

Quote from: hotdogPi on April 15, 2025, 01:10:47 PMAm I the only one with a refund for federal but had to pay for state?

I owed 2x to Federal and got x refund state. My normal MO.

I use a free e-filing service because I expect things to work like in other competent developed nations. I refuse to pay a private company to file my taxes and lobby for more complicated self-filing.

No state income tax, though given Washington's financial situation it would be better to have than the patchwork of 10% sales taxes and other use taxes we have instead.

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Quote from: Bruce on April 15, 2025, 04:42:46 PMI use a free e-filing service because I expect things to work like in other competent developed nations. I refuse to pay a private company to file my taxes and lobby for more complicated self-filing.

No state income tax, though given Washington's financial situation it would be better to have than the patchwork of 10% sales taxes and other use taxes we have instead.

Free e-filing services accept payment in personal data.

Quote from: Rothman on April 15, 2025, 04:47:48 PMFree e-filing services accept payment in personal data.

My data has been leaked and stolen by a wide number of reputable corporations, because apparently data security has never been profitable enough for them to care.

At least this case gives me some decent benefits.

Quote from: Rothman on April 15, 2025, 04:47:48 PMFree e-filing services accept payment in personal data.

Kinda irrelevant now.

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

Quote from: SEWIGuy on April 15, 2025, 04:52:50 PM

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

That assumes you know how to calculate your actual tax rate with the current brackets.

Quote from: Rothman on April 15, 2025, 04:55:01 PM

Quote from: SEWIGuy on April 15, 2025, 04:52:50 PM

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

That assumes you know how to calculate your actual tax rate with the current brackets.

That might change on a week to week basis, who knows.

Quote from: Rothman on April 15, 2025, 04:55:01 PM

Quote from: SEWIGuy on April 15, 2025, 04:52:50 PM

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

That assumes you know how to calculate your actual tax rate with the current brackets.

There are simple calculators on the internet. None of this is hard.

Quote from: SEWIGuy on April 15, 2025, 05:01:33 PM

Quote from: Rothman on April 15, 2025, 04:55:01 PM

Quote from: SEWIGuy on April 15, 2025, 04:52:50 PM

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

That assumes you know how to calculate your actual tax rate with the current brackets.

There are simple calculators on the internet. None of this is hard.

Harder than you'd think when one spouse pays into Social Security and one pays into a state-sponsored pension fund.

Quote from: JayhawkCO on April 15, 2025, 05:03:46 PM

Quote from: SEWIGuy on April 15, 2025, 05:01:33 PM

Quote from: Rothman on April 15, 2025, 04:55:01 PM

Quote from: SEWIGuy on April 15, 2025, 04:52:50 PM

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

That assumes you know how to calculate your actual tax rate with the current brackets.

There are simple calculators on the internet. None of this is hard.

Harder than you'd think when one spouse pays into Social Security and one pays into a state-sponsored pension fund.

I was talking specifically about vdeane - one income with standard deduction. Assuming it is a steady income, the calculation is pretty simple.

I don't pay taxes in America. That's because I'm in Canada, where I pay taxes instead, I promise.

Quote from: LilianaUwU on April 15, 2025, 05:17:28 PMI don't pay taxes in America. That's because I'm in Canada, where I pay taxes instead, I promise.

Well get ready, your filing deadline is April 30.

Quote from: Bruce on April 15, 2025, 04:42:46 PMI use a free e-filing service because I expect things to work like in other competent developed nations. I refuse to pay a private company to file my taxes and lobby for more complicated self-filing.

No state income tax, though given Washington's financial situation it would be better to have than the patchwork of 10% sales taxes and other use taxes we have instead.

Switching to a return free filing system with our current tax code would create a massive administrative burden on employers and the IRS. Those other developed countries you speak of have one bracket that covers most taxpayers, they don't do joint filing, and they don't administer much of their welfare state through the tax code.

Quote from: LilianaUwU on April 15, 2025, 05:17:28 PMI don't pay taxes in America. That's because I'm in Canada, where I pay taxes instead, I promise.

For now, anyway. Once we have Greenland, we can attack Canada from 3 directions at once!

Quote from: SEWIGuy on April 15, 2025, 05:11:49 PM

Quote from: JayhawkCO on April 15, 2025, 05:03:46 PM

Quote from: SEWIGuy on April 15, 2025, 05:01:33 PM

Quote from: Rothman on April 15, 2025, 04:55:01 PM

Quote from: SEWIGuy on April 15, 2025, 04:52:50 PM

Quote from: Rothman on April 15, 2025, 04:47:13 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

This is baloney given the diabolical "new" W4.  I itemize deductions and I have to do the math for the W4 form or it'll withhold the wrong amount, whether up or down.  Takes a long time to figure out how to do it right, since you can't trust what the W4 assumes for you.

Or just look at your latest paystub, see what is being withheld, and do the math to figure out where you will end up at the end of the year. Then you can either change your withholdings or just stick anything extra in a savings account.

That assumes you know how to calculate your actual tax rate with the current brackets.

There are simple calculators on the internet. None of this is hard.

Harder than you'd think when one spouse pays into Social Security and one pays into a state-sponsored pension fund.

I was talking specifically about vdeane - one income with standard deduction. Assuming it is a steady income, the calculation is pretty simple.

Oh, fine.

I don't actually know. I sent all of my information in to the accountant that I've been using for the last 10 years back in February, and I haven't heard back from her. This happened last year, and it turned out she had filed for an extension on my behalf and finally got the return done in October.

I like her a lot and she's done a good job, but this will probably be the last year I use her.

Quote from: kernals12 on April 15, 2025, 05:37:12 PMSwitching to a return free filing system with our current tax code would create a massive administrative burden on employers and the IRS.

As opposed to now, where the massive administrative burden is on the taxpayers.

I'd rather the burden be on someone who's getting paid to deal with it, myself.

Quote from: GaryV on April 15, 2025, 05:50:26 PMFor now, anyway. Once we have Greenland, we can attack Canada from 3 directions at once!

This isn't actually funny, you know.

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

Well, clearly the tables are wrong or they made a mistake somewhere.  I checked my W4 and everything is correct as always: single, no other income, no dependents, additional $5/paycheck as I set up years ago.  Since my overall situation is simple and doesn't change except for the exact numbers, shouldn't the amount withheld be roughly the same relatively speaking?  And why would it only affect federal, but not state?  New York's tax code is very close to the federal tax code, to the point where the first part of NYS taxes is replicating your federal return (after which you do NYS additions and subtractions, of which I only have my pension contribution, as always).

Unfortunately, figuring out exactly how much I'll owe is easier said than done.  Not only do I budget off of net income numbers and don't have the greatest idea what percentage of my paycheck should be withheld for taxes, but NYS fiscal year is April-March, not January-December like the tax year, so my income tends to bump up sometime in April as my annual raise and step increase happen at that time.  Making things weirder, the IRS calculator based on paycheck numbers claims I'm on track for a refund this year... so why did I owe last year when my withholding amount went down slightly on January 1?  Something's rotten about this whole situation, but I can't figure out what, especially since everybody is just having a knee-jerk reaction to assume that I'm doing something wrong and need to hire a tax preparer, even though my 2024 return is identical to my 2023 return except for using the numbers from my 2024 W2 and tax tables (as one would expect if neither my tax situation nor the 1040 have changed) except for owing instead of getting a refund (and strangely, owing around the same amount I normally get as a refund).

I know the US tax code is specifically designed to enrich the tax prep parasites "industry", but this is beyond the pale even by US standards.

I owe almost every year, fed and state. Part of that is I probably should increase my withholdings but screw that. I do make the quartely estimated payments to the IRS to cover my under-witholdings. I prefer to have the money in my own hand first before the Feds get all of theirs

Quote from: vdeane on April 15, 2025, 09:34:01 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

Well, clearly the tables are wrong or they made a mistake somewhere.  I checked my W4 and everything is correct as always: single, no other income, no dependents, additional $5/paycheck as I set up years ago.  Since my overall situation is simple and doesn't change except for the exact numbers, shouldn't the amount withheld be roughly the same relatively speaking?  And why would it only affect federal, but not state?  New York's tax code is very close to the federal tax code, to the point where the first part of NYS taxes is replicating your federal return (after which you do NYS additions and subtractions, of which I only have my pension contribution, as always).

Unfortunately, figuring out exactly how much I'll owe is easier said than done.  Not only do I budget off of net income numbers and don't have the greatest idea what percentage of my paycheck should be withheld for taxes, but NYS fiscal year is April-March, not January-December like the tax year, so my income tends to bump up sometime in April as my annual raise and step increase happen at that time.  Making things weirder, the IRS calculator based on paycheck numbers claims I'm on track for a refund this year... so why did I owe last year when my withholding amount went down slightly on January 1?  Something's rotten about this whole situation, but I can't figure out what, especially since everybody is just having a knee-jerk reaction to assume that I'm doing something wrong and need to hire a tax preparer, even though my 2024 return is identical to my 2023 return except for using the numbers from my 2024 W2 and tax tables (as one would expect if neither my tax situation nor the 1040 have changed) except for owing instead of getting a refund (and strangely, owing around the same amount I normally get as a refund).

I know the US tax code is specifically designed to enrich the tax prep parasites "industry", but this is beyond the pale even by US standards.

Just a few ideas:  Maybe your salary creep up into a higher marginal tax bracket.  Or, since you said you get annual increases in April, maybe that has something to do with it.  Or other withholdings from your paycheck (we have a 457B (Deferred Comp) that could affect current tax liability.

Quote from: hotdogPi on April 15, 2025, 01:10:47 PMAm I the only one with a refund for federal but had to pay for state? (The amount I owed to Massachusetts was $24, while my federal refund was three digits.)

I had this issue for several years.  Ultimately, I think tax brackets changed in the state so now it flips the other way.

Quote from: kernals12 on April 15, 2025, 02:27:45 PMI filed in February. Being unemployed for 5 months and then taking a new job with lower pay means a big refund. I also needed to file 2 state returns because I moved.

A big refund is not desirable. It's an interest free loan to the government

When I worked in Delaware, I paid their state income tax, then took the credit on my NJ taxes where I lived.  Since DE has a higher income tax in exchange for no sales tax, I generally lost money since the income tax I paid to DE was higher than what I would've paid to NJ.  But, I also made a significant number of purchases tax-free in DE, so it all evened out.

Quote from: SEWIGuy on April 15, 2025, 09:34:01 PMTax rates and withholding are altered annually based on inflation.

And also on the change in the standard deduction, which is built into the withholding tables.

Quote from: vdeane on April 15, 2025, 10:11:07 PMNew York's tax code is very close to the federal tax code, to the point where the first part of NYS taxes is replicating your federal return (after which you do NYS additions and subtractions, of which I only have my pension contribution, as always).

The part about determining your taxable income, yes.  The part about determining your tax liability, no.

---

I kind of miss driving to a "main" post office branch just before midnight on April 15th to watch the vehicle parades of people dropping off their tax returns.

Quote from: vdeane on April 15, 2025, 09:34:01 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

Well, clearly the tables are wrong or they made a mistake somewhere.  I checked my W4 and everything is correct as always: single, no other income, no dependents, additional $5/paycheck as I set up years ago.  Since my overall situation is simple and doesn't change except for the exact numbers, shouldn't the amount withheld be roughly the same relatively speaking?  And why would it only affect federal, but not state?  New York's tax code is very close to the federal tax code, to the point where the first part of NYS taxes is replicating your federal return (after which you do NYS additions and subtractions, of which I only have my pension contribution, as always).

Unfortunately, figuring out exactly how much I'll owe is easier said than done.  Not only do I budget off of net income numbers and don't have the greatest idea what percentage of my paycheck should be withheld for taxes, but NYS fiscal year is April-March, not January-December like the tax year, so my income tends to bump up sometime in April as my annual raise and step increase happen at that time.  Making things weirder, the IRS calculator based on paycheck numbers claims I'm on track for a refund this year... so why did I owe last year when my withholding amount went down slightly on January 1?  Something's rotten about this whole situation, but I can't figure out what, especially since everybody is just having a knee-jerk reaction to assume that I'm doing something wrong and need to hire a tax preparer, even though my 2024 return is identical to my 2023 return except for using the numbers from my 2024 W2 and tax tables (as one would expect if neither my tax situation nor the 1040 have changed) except for owing instead of getting a refund (and strangely, owing around the same amount I normally get as a refund).

I know the US tax code is specifically designed to enrich the tax prep parasites "industry", but this is beyond the pale even by US standards.

It's not nearly so simple. All sorts of special interest groups lobby for their particular tax breaks and it all adds up to our monstrously complex system.

Quote from: vdeane on April 15, 2025, 09:34:01 PM

Quote from: SEWIGuy on April 15, 2025, 02:09:21 PM

Quote from: vdeane on April 15, 2025, 01:02:18 PMI file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

Well, clearly the tables are wrong or they made a mistake somewhere.  I checked my W4 and everything is correct as always: single, no other income, no dependents, additional $5/paycheck as I set up years ago.  Since my overall situation is simple and doesn't change except for the exact numbers, shouldn't the amount withheld be roughly the same relatively speaking?  And why would it only affect federal, but not state?  New York's tax code is very close to the federal tax code, to the point where the first part of NYS taxes is replicating your federal return (after which you do NYS additions and subtractions, of which I only have my pension contribution, as always).

Unfortunately, figuring out exactly how much I'll owe is easier said than done.  Not only do I budget off of net income numbers and don't have the greatest idea what percentage of my paycheck should be withheld for taxes, but NYS fiscal year is April-March, not January-December like the tax year, so my income tends to bump up sometime in April as my annual raise and step increase happen at that time.  Making things weirder, the IRS calculator based on paycheck numbers claims I'm on track for a refund this year... so why did I owe last year when my withholding amount went down slightly on January 1?  Something's rotten about this whole situation, but I can't figure out what, especially since everybody is just having a knee-jerk reaction to assume that I'm doing something wrong and need to hire a tax preparer, even though my 2024 return is identical to my 2023 return except for using the numbers from my 2024 W2 and tax tables (as one would expect if neither my tax situation nor the 1040 have changed) except for owing instead of getting a refund (and strangely, owing around the same amount I normally get as a refund).

I know the US tax code is specifically designed to enrich the tax prep parasites "industry", but this is beyond the pale even by US standards.

Just use FreeTaxUSA. It's cheap and easy for simple returns like yours. No need to hire a tax preparer for a simple return like yours with one W2 and a standard deduction.

I waited until Sunday to file. Every year since I moved to Iowa, I have got a federal refund, but owe the state, and this year was no exception. A good chunk of what I owe the state each year is the school district surtax.

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

This was not the case for me. Federal (refund) took four minutes; state (payment) took two hours and four minutes.

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

You can set the date you want your payment to be made right?

Quote from: SEWIGuy on April 16, 2025, 08:48:03 AM

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

You can set the date you want your payment to be made right?

Can't set the date you get your refund, right?

Quote from: hotdogPi on April 16, 2025, 07:08:09 AM

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

This was not the case for me. Federal (refund) took four minutes; state (payment) took two hours and four minutes.

Huh.  Never had a federal refund go through that quickly for me.

Quote from: Rothman on April 16, 2025, 09:53:13 AM

Quote from: hotdogPi on April 16, 2025, 07:08:09 AM

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

This was not the case for me. Federal (refund) took four minutes; state (payment) took two hours and four minutes.

Huh.  Never had a federal refund go through that quickly for me.

Ha. I don't remember the last time I got a Federal refund. Probably circa 2003.

Quote from: Rothman on April 16, 2025, 09:51:16 AM

Quote from: SEWIGuy on April 16, 2025, 08:48:03 AM

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

You can set the date you want your payment to be made right?

Can't set the date you get your refund, right?

Correct. But my point is that if you file early enough, you will almost always be able to get your refund before you would have to pay.

Quote from: SEWIGuy on April 16, 2025, 04:44:55 AMJust use FreeTaxUSA. It's cheap and easy for simple returns like yours. No need to hire a tax preparer for a simple return like yours with one W2 and a standard deduction.

That's only free if you make poverty level wages.  Why should I have to pay to fill out a government form?  I use Free File Fillable Forms for federal and manually print/mail my state return since NY took away any free efile ability for those who don't qualify for "Free File Alliance" a decade ago.  There's also IRS DirectFile, but that requires jumping through a zillion hoops to verify your identity to create an account, and I'm not dealing with that when I consider it very likely that the current administration will kill the program.

Needless to say, my opinion of the tax prep parasites "industry" is very low and I don't want to support these grifters.  They've successfully lobbied both Congress and state governments to keep US taxes from being a simple as the rest of the world, and as far as I'm concerned, they should be punished, not rewarded.

Quote from: jeffandnicole on April 15, 2025, 10:11:07 PMJust a few ideas:  Maybe your salary creep up into a higher marginal tax bracket.  Or, since you said you get annual increases in April, maybe that has something to do with it.  Or other withholdings from your paycheck (we have a 457B (Deferred Comp) that could affect current tax liability.

They've never caused an issue like this, though.  The only thing I can think of is that something went wonky in the paychecks where they did the dental stipends and higher education bonus (which bumped things up to $1400 over base salary), but it still doesn't explain why the withholding for state was on target while the withholding for federal was less than it should have been for my income/W4.

Quote from: vdeane on April 16, 2025, 12:50:05 PM

Quote from: SEWIGuy on April 16, 2025, 04:44:55 AMJust use FreeTaxUSA. It's cheap and easy for simple returns like yours. No need to hire a tax preparer for a simple return like yours with one W2 and a standard deduction.

That's only free if you make poverty level wages.  Why should I have to pay to fill out a government form?  I use Free File Fillable Forms for federal and manually print/mail my state return since NY took away any free efile ability for those who don't qualify for "Free File Alliance" a decade ago. 

Well, I guess you can either take a stand and worry that you did it wrong, or pay $15 to ensure you did it right. I get the frustration for paying someone to fill out a form, but that's something that I guess I just got over long ago.

Quote from: kernals12 on April 15, 2025, 05:32:59 PM

Quote from: LilianaUwU on April 15, 2025, 05:17:28 PMI don't pay taxes in America. That's because I'm in Canada, where I pay taxes instead, I promise.

Well get ready, your filing deadline is April 30.

Promises can only get someone so far.

Quote from: Rothman on April 16, 2025, 06:50:55 AMIt's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

They need to make sure your math is correct and that the return isn't being filed fraudulently.

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

They also need to make sure your math is correct if you're paying them too, you know.

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PMGovernment: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Sounds about right.  It's ridiculous.

Of course, on the other hand, they don't double-check everyone's, do they?

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PM

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Quote from: kernals12 on April 16, 2025, 05:42:01 PM

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PM

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Typically in these kind of threads usually everyone just shits on the IRS.  The reason they do it is because nobody likes paying taxes.  Probably just best to play along or ignore the rhetoric or someone will suddenly think you are with the tax man.

Quote from: Max Rockatansky on April 16, 2025, 05:59:39 PM

Quote from: kernals12 on April 16, 2025, 05:42:01 PM

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PM

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Typically in these kind of threads usually everyone just shits on the IRS.  The reason they do it is because nobody likes paying taxes.  Probably just best to play along or ignore the rhetoric less or someone will suddenly think you are with the tax man.

I have no problem with the human beings that work for the IRS. I do have a problem with how complicated the tax code is and how you can do all kinds of financial shenanigans to not actually have to pay any taxes despite a very large income.

Quote from: JayhawkCO on April 16, 2025, 06:40:02 PM

Quote from: Max Rockatansky on April 16, 2025, 05:59:39 PM

Quote from: kernals12 on April 16, 2025, 05:42:01 PM

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PM

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Typically in these kind of threads usually everyone just shits on the IRS.  The reason they do it is because nobody likes paying taxes.  Probably just best to play along or ignore the rhetoric less or someone will suddenly think you are with the tax man.

I have no problem with the human beings that work for the IRS. I do have a problem with how complicated the tax code is and how you can do all kinds of financial shenanigans to not actually have to pay any taxes despite a very large income.

Yes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?  Only one person is taking this thread way too seriously.

Me personally I have no particular beef with IRS workers.  Tax code like you said is a PIA to learn the ins and outs of.  I have so many moving pieces on my end that it was worth the investment to just to hire a real accountant. 

(https://i.imgur.com/vqt5viY.png)

If you want to be depressed, here's the IRS' worksheet for calculating capital gains tax.

Things would be a lot simpler if capital gains were taxed like ordinary income with the basis adjusted for inflation and retained earnings.

I mean, there's a lot of boxes on that form, but if you actually read it it's basically writing out the steps of how to build an Excel spreadsheet to do it for you.

The really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about (which is less likely because the tax code is usually simpler).

Quote from: Max Rockatansky on April 16, 2025, 06:41:35 PMYes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Quote from: JayhawkCO on April 16, 2025, 09:14:35 PM

Quote from: Max Rockatansky on April 16, 2025, 06:41:35 PMYes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Say wut? 

Quote from: kernals12 on April 15, 2025, 02:39:28 PM

Quote from: seicer on April 15, 2025, 11:05:09 AMAdditionally, I own a small business, which allows me to write off many of my purchases and mileage.

I certainly hope those purchases and miles were for legitimate business purposes.

Quote from: kernals12 on April 16, 2025, 07:10:04 PM[image snipped]
If you want to be depressed, here's the IRS' worksheet for calculating capital gains tax.

Things would be a lot simpler if capital gains were taxed like ordinary income with the basis adjusted for inflation and retained earnings.

Calculation of tax on qualified dividends and capital gains looks intimidating at first glance...but it's fifth-grade level mathematics.  Working through that by hand with pencil and calculator is great for helping you understand exactly which parts of your income are being taxed at the different rates.

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMI mean, there's a lot of boxes on that form, but if you actually read it it's basically writing out the steps of how to build an Excel spreadsheet to do it for you.

The really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about (which is less likely because the tax code is usually simpler).

I worry that something like that here would turbocharge the already massive problem of identity fraud.

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMI mean, there's a lot of boxes on that form, but if you actually read it it's basically writing out the steps of how to build an Excel spreadsheet to do it for you.

The really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about (which is less likely because the tax code is usually simpler).

My wife does an Australian tax return. I'd rather do an Australian tax return than the monstrosity we file every year.

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PM

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

Although to be fair, almost no one goes to prison. Prison is saved for the most fraudulent of returns.  Here's one example:

The owner of Manco & Manco, which has a small chain of pizzerias with 3 of them on the Ocean City NJ Boardwalk, went to jail several years back for fraudulent returns. 

Those boardwalk locations only take cash. 

This is what I imagine took place (this is just me thinking out loud; I don't know any details behind the investigation other than in the link below):

Manco & Manco is very popular, and sells a lot of pizzas.

There are numerous other pizzerias on the OCNJ Boardwalk.

When Manco & Manco did their taxes, they hid a lot of their cash revenues, but reported all of their expenses.

Other less-popular pizzerias did their taxes more honorably, and showed a much greater level of revenues.

Go back 4 sentences.  Manco & Manco is very popular.  IRS agents have families and visit OCNJ on their summer vacations and are familiar with Manco & Manco.

Someone clued in that the revenue Manco & Manco had been reporting on their taxes is way out of line compared to their expenses, and compared to other less-popular pizzerias in OCNJ.

The IRS investigates the owners, a husband and wife.

IRS determines the owners hid a lot of money by depositing it into their personal accounts rather than the business accounts.

Wife also lied to investigators.

Wife gets probation. Husband gets 15 months jail time.  Judge has a heart and allows the husband to work the summer season, and sets his jail sentence to begin after Labor Day.

https://www.justice.gov/usao-nj/pr/owners-popular-ocean-city-new-jersey-pizza-restaurants-sentenced-tax-evasion-structuring

Quote from: JayhawkCO on April 16, 2025, 09:14:35 PM

Quote from: Max Rockatansky on April 16, 2025, 06:41:35 PMYes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Wait, how'd I get dragged into this?

Quote from: Rothman on April 16, 2025, 10:31:52 PM

Quote from: JayhawkCO on April 16, 2025, 09:14:35 PM

Quote from: Max Rockatansky on April 16, 2025, 06:41:35 PMYes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Wait, how'd I get dragged into this?

Because I'm a skeptic. (I picked two of the people on here who seemingly can take a joke.)

Quote from: JayhawkCO on April 16, 2025, 10:36:41 PM

Quote from: Rothman on April 16, 2025, 10:31:52 PM

Quote from: JayhawkCO on April 16, 2025, 09:14:35 PM

Quote from: Max Rockatansky on April 16, 2025, 06:41:35 PMYes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Wait, how'd I get dragged into this?

Because I'm a skeptic. (I picked two of the people on here who seemingly can take a joke.)

*writes it off on his taxes*

Quote from: Rothman on April 16, 2025, 10:37:09 PM

Quote from: JayhawkCO on April 16, 2025, 10:36:41 PM

Quote from: Rothman on April 16, 2025, 10:31:52 PM

Quote from: JayhawkCO on April 16, 2025, 09:14:35 PM

Quote from: Max Rockatansky on April 16, 2025, 06:41:35 PMYes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Wait, how'd I get dragged into this?

Because I'm a skeptic. (I picked two of the people on here who seemingly can take a joke.)

*writes it off on his taxes*

Ah, seems I didn't realize this was an audit.

None of the options in the poll applies to me, which is surprising since I don't think my situation is terribly unusual.

I filed for an extension, and I expect to get a refund when my return is actually prepared.

One of the places that sends me information didn't get it to me by mid-February and my CPA's deadline for filing by April 15 was the beginning of March, and I was traveling in some of March.

I started using a CPA when my dad was so poorly off that he couldn't manage his finances.  He had a small rental property, so there was income and deductions from it to count up, and the property was in California so he had both Federal and California returns to do, so I found a CPA who knew how to do California returns.  Now I might be able to do them by myself but it would still be painful so I keep using the CPA.

Do keep in mind that the IRS employees didn't decide to make the tax code complicated.  They're the prisoners of Congress just like taxpayers are.

Getting a refund doesn't bother me.  Yes, it's a 0-interest loan to the government, but what else would I do with the money?  It would be short-term because I know I'll need it in 15 months or less.  It would need to be secure so that I'm not caught short if there's a market downturn in April.  That pretty much leaves savings accounts, which are a 0-interest loan to a bank...

Quote from: jeffandnicole on April 16, 2025, 10:27:17 PM

Quote from: JayhawkCO on April 16, 2025, 05:16:16 PM

Quote from: kernals12 on April 16, 2025, 04:57:03 PMThey need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

Although to be fair, almost no one goes to prison. Prison is saved for the most fraudulent of returns.  Here's one example:

The owner of Manco & Manco, which has a small chain of pizzerias with 3 of them on the Ocean City NJ Boardwalk, went to jail several years back for fraudulent returns. 

Those boardwalk locations only take cash. 

This is what I imagine took place (this is just me thinking out loud; I don't know any details behind the investigation other than in the link below):

Manco & Manco is very popular, and sells a lot of pizzas.

There are numerous other pizzerias on the OCNJ Boardwalk.

When Manco & Manco did their taxes, they hid a lot of their cash revenues, but reported all of their expenses.

Other less-popular pizzerias did their taxes more honorably, and showed a much greater level of revenues.

Go back 4 sentences.  Manco & Manco is very popular.  IRS agents have families and visit OCNJ on their summer vacations and are familiar with Manco & Manco.

Someone clued in that the revenue Manco & Manco had been reporting on their taxes is way out of line compared to their expenses, and compared to other less-popular pizzerias in OCNJ.

The IRS investigates the owners, a husband and wife.

IRS determines the owners hid a lot of money by depositing it into their personal accounts rather than the business accounts.

Wife also lied to investigators.

Wife gets probation. Husband gets 15 months jail time.  Judge has a heart and allows the husband to work the summer season, and sets his jail sentence to begin after Labor Day.

https://www.justice.gov/usao-nj/pr/owners-popular-ocean-city-new-jersey-pizza-restaurants-sentenced-tax-evasion-structuring

One wonders how such tax evasion will continue as cash becomes less and less popular.

Why would one "wonder"? Off-shoring is still popular, and just because a lot of our transactions are electronic doesn't mean someone can't evade paying taxes.

How long before someone makes a federal case out of extending last year's 'Chevron' decision by the USSupreme Court to the Income tax (You must cover ALL of the costs that I incurred while complying with your laws)?  Effects?

 :hmmm:

Mike

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

Quote from: seicer on April 17, 2025, 09:03:23 AMWhy would one "wonder"? Off-shoring is still popular, and just because a lot of our transactions are electronic doesn't mean someone can't evade paying taxes.

No, but clearly it would make tax evasion a lot harder. There's a reason that tax cheats prefer cash.

Quote from: kphoger on April 17, 2025, 11:03:57 AM

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

For most people, a tax return is an invoice to the Government.

Quote from: kernals12 on April 17, 2025, 11:26:04 AMFor most people, a tax return is an invoice to the Government.

A tax return tells you how much money you owe the government—i.e. an invoice.  Getting a refund or having to pay more at that point is just an adjustment based on how much you've already pre-paid on the invoice.

Quote from: kphoger on April 17, 2025, 11:03:57 AM

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

It isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

Quote from: kphoger on April 17, 2025, 12:12:43 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

I disagree. Giving people financial incentive to do good things (gifts to charity, home ownership, save for retirement) is a great way to motivate them to do those things.

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

Given how much information banks report to the federal government (to the point where many banks outside the US refuse to open accounts to people with American citizenship), they probably do know all that.  In fact, I've been reading this year that pretty much every electronic transaction gets reported to the IRS (certainly anything involving banking/ACH, but possibly even credit card transactions).

Quote from: kphoger on April 17, 2025, 12:12:43 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

I won't argue with that. But it's the taxation system that we've wound up with as a result of the efforts of lobbyists and influence peddlers.

Quote from: vdeane on April 17, 2025, 12:58:01 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

Given how much information banks report to the federal government (to the point where many banks outside the US refuse to open accounts to people with American citizenship), they probably do know all that.  In fact, I've been reading this year that pretty much every electronic transaction gets reported to the IRS (certainly anything involving banking/ACH, but possibly even credit card transactions).

If the IRS knew all that, then they wouldn't be losing $600 billion a year to evasion. (https://www.irs.gov/statistics/irs-the-tax-gap)

And no, not every electronic transaction is reported to the IRS,  if they were, then it would mean you'd receive a 1099 every time you were Venmo'd $20 for dinner by your best friend. Beginning in 2026 electronic payment platforms will begin producing 1099Ks for transactions of over $600.

Quote from: SEWIGuy on April 17, 2025, 12:23:08 PMGiving people financial incentive to do good things (gifts to charity, home ownership, save for retirement) is a great way to motivate them to do those things.

I agree that it's good to incentivize doing good things.  But I disagree that it's commonsense for that to be done in the form of income tax adjustments.

Quote from: kernals12 on April 17, 2025, 01:09:54 PMAnd no, not every electronic transaction is reported to the IRS, they were, then it would mean you'd receive a 1099K every time you were Venmo'd $20 for dinner by your best friend.

Please explain how that would fall under the requirements of the 1099-K.

"Payments you got from family and friends should not be reported on Form 1099-K."  —the IRS

Quote from: kphoger on April 17, 2025, 01:18:19 PM

Quote from: kernals12 on April 17, 2025, 01:09:54 PMAnd no, not every electronic transaction is reported to the IRS, they were, then it would mean you'd receive a 1099K every time you were Venmo'd $20 for dinner by your best friend.

Please explain how that would fall under the requirements of the 1099-K.

"Payments you got from family and friends should not be reported on Form 1099-K."  —the IRS

Exactly, so contrary to what Vdeane claimed, not every electronic transaction is reported to the IRS

Quote from: SEWIGuy on April 17, 2025, 12:23:08 PM

Quote from: kphoger on April 17, 2025, 12:12:43 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

I disagree. Giving people financial incentive to do good things (gifts to charity, home ownership, save for retirement) is a great way to motivate them to do those things.

Why is home ownership "good"?

Quote from: vdeane on April 17, 2025, 12:58:01 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

Given how much information banks report to the federal government (to the point where many banks outside the US refuse to open accounts to people with American citizenship), they probably do know all that.  In fact, I've been reading this year that pretty much every electronic transaction gets reported to the IRS (certainly anything involving banking/ACH, but possibly even credit card transactions).

I'm sure the transaction is reported. Does tht IRS know how much of my mortgage payment is principal, interest and escrow? And what the escrow is for?

Quote from: kernals12 on April 17, 2025, 01:21:48 PM

Quote from: SEWIGuy on April 17, 2025, 12:23:08 PM

Quote from: kphoger on April 17, 2025, 12:12:43 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

I disagree. Giving people financial incentive to do good things (gifts to charity, home ownership, save for retirement) is a great way to motivate them to do those things.

Why is home ownership "good"?

There are all sorts of reasons why home ownership is good. Children benfit from a more stable environment. Home ownership usually means people who are more vested in their communities. It almost always the first or second source of individual wealth for most Americans, etc. etc. etc.

Quote from: kernals12 on April 17, 2025, 01:09:54 PMAnd no, not every electronic transaction is reported to the IRS, they were, then it would mean you'd receive a 1099K every time you were Venmo'd $20 for dinner by your best friend.

Quote from: kphoger on April 17, 2025, 01:18:19 PMPlease explain how that would fall under the requirements of the 1099-K.

"Payments you got from family and friends should not be reported on Form 1099-K."  —the IRS

Quote from: kernals12 on April 17, 2025, 01:19:44 PMExactly, so contrary to what Vdeane claimed, not every electronic transaction is reported to the IRS

You misunderstood me.

You claimed that, if every electronic transaction were reported to the IRS, then the IRS would send you a 1099-K for receiving $20 from your best friend.  Please explain why you think that, when the IRS explicitly says payments from friends should not be reported on the 1099-K.

Quote from: SEWIGuy on April 17, 2025, 01:30:15 PMThere are all sorts of reasons why home ownership is good. Children benfit from a more stable environment. Home ownership usually means people who are more vested in their communities. It almost always the first or second source of individual wealth for most Americans, etc. etc. etc.

I'll agree with your first two points. I'll happily disagree with the third. The third is accurate. I don't agree that that is necessarily a good thing.

Quote from: SEWIGuy on April 17, 2025, 01:30:15 PM

Quote from: kernals12 on April 17, 2025, 01:21:48 PM

Quote from: SEWIGuy on April 17, 2025, 12:23:08 PM

Quote from: kphoger on April 17, 2025, 12:12:43 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

I disagree. Giving people financial incentive to do good things (gifts to charity, home ownership, save for retirement) is a great way to motivate them to do those things.

Why is home ownership "good"?

There are all sorts of reasons why home ownership is good. Children benfit from a more stable environment. Home ownership usually means people who are more vested in their communities. It almost always the first or second source of individual wealth for most Americans, etc. etc. etc.

Having hundreds of thousands of dollars tied up in one asset goes contrary to all expert advice on portfolio allocation. The difficulty of selling your home reduces economic mobility. And as we saw in the other thread about people in Wisconsin complaining that a new Buc-ee's will reduce their property values, it fuels NIMBYism.

It's also important to remember that even if we repealed the deductions for property taxes and mortgage interest, owner occupied housing would still have the benefit of the implicit rent that homeowners pay themselves not being taxed.

kernals12 favors urban planning. Got it.

Quote from: hotdogPi on April 17, 2025, 02:24:50 PMkernals12 favors urban planning. Got it.

How did you infer that from my comment?

Quote from: kernals12 on April 17, 2025, 02:22:30 PM

Quote from: SEWIGuy on April 17, 2025, 01:30:15 PM

Quote from: kernals12 on April 17, 2025, 01:21:48 PM

Quote from: SEWIGuy on April 17, 2025, 12:23:08 PM

Quote from: kphoger on April 17, 2025, 12:12:43 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

And I'd argue that those things affecting your tax liability is not a commonsense taxation system.

I disagree. Giving people financial incentive to do good things (gifts to charity, home ownership, save for retirement) is a great way to motivate them to do those things.

Why is home ownership "good"?

There are all sorts of reasons why home ownership is good. Children benfit from a more stable environment. Home ownership usually means people who are more vested in their communities. It almost always the first or second source of individual wealth for most Americans, etc. etc. etc.

Having hundreds of thousands of dollars tied up in one asset goes contrary to all expert advice on portfolio allocation. The difficulty of selling your home reduces economic mobility. And as we saw in the other thread about people in Wisconsin complaining that a new Buc-ee's will reduce their property values, it fuels NIMBYism.

It's also important to remember that even if we repealed the deductions for property taxes and mortgage interest, owner occupied housing would still have the benefit of the implicit rent that homeowners pay themselves not being taxed.

You asked, I answered. And I don't find your counters to be compelling.

Wait...no one is going to point out that the IRS "tax gap" is not tax evasion?  Fine.  I will.

I e-filed in late March. Got refunds from both federal and state, which usually is what happens. We've already received our federal refund, but still waiting for state.

When I was preparing our federal return, the last thing I entered was the info from our Form 1095A for our medical insurance. Before I entered it, we were set to owe a three-digit figure. After entering it, we suddenly had a four-figure refund.

As an IRS employee, I'm just gonna pretend I didn't read most of this thread.

Quote from: NWI_Irish96 on April 17, 2025, 04:13:21 PMAs an IRS employee, I'm just gonna pretend I didn't read most of this thread.

So you do know about kernals12's unauthorized Wendy's payment!

Quote from: NWI_Irish96 on April 17, 2025, 04:13:21 PMAs an IRS employee, I'm just gonna pretend I didn't read most of this thread.

There are still IRS employees left?

Quote from: Rothman on April 17, 2025, 05:01:57 PM

Quote from: NWI_Irish96 on April 17, 2025, 04:13:21 PMAs an IRS employee, I'm just gonna pretend I didn't read most of this thread.

There are still IRS employees left?

Today, yes. Tomorrow, who knows??

Quote from: kernals12 on April 17, 2025, 02:26:20 PMHaving hundreds of thousands of dollars tied up in one asset goes contrary to all expert advice on portfolio allocation. The difficulty of selling your home reduces economic mobility. And as we saw in the other thread about people in Wisconsin complaining that a new Buc-ee's will reduce their property values, it fuels NIMBYism.

I don't own my home for investment purposes.  I own it to live in.  Which helps lead to stable environment, vesting in community, etc.  Any NIMBYism I have is primarily because the proposed development is incompatible with the existing quality of life in the area, not because of a concern over property value.

Quote from: NWI_Irish96 on April 17, 2025, 04:13:21 PMAs an IRS employee, I'm just gonna pretend I didn't read most of this thread.

As a payroll professional, I can say with some authority that I have dealt with several IRS reps over the years and have found them to be pleasant, helpful, and professional.  I'm sure there are a few bad apples in customer service roles who don't know and don't give a sh!t, but that's as it is in any organization.  And IRS folks are just as unhappy about the tax code complexities and last-minute changes because they're the ones who have to work out how to make them happen.

Quote from: Rothman on April 17, 2025, 05:01:57 PMThere are still IRS employees left?

Don't you care if that gets you banned?

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AM

Quote from: kphoger on April 17, 2025, 11:03:57 AM

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

It isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

That alone would be a massive improvement. The majority of people don't need to itemize because the standard deduction would be larger than the sum of their itemized deductions.

Hell, I have a small business and while that adds all sorts of schedules and attachments, I still take the standard deduction.

Quote from: Scott5114 on April 17, 2025, 08:14:23 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AM

Quote from: kphoger on April 17, 2025, 11:03:57 AM

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

It isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

That alone would be a massive improvement. The majority of people don't need to itemize because the standard deduction would be larger than the sum of their itemized deductions.

Hell, I have a small business and while that adds all sorts of schedules and attachments, I still take the standard deduction.

A sad statement on the level of home ownership.

Quote from: Rothman on April 17, 2025, 08:56:59 PMA sad statement on the level of home ownership.

When I bought my first home and my CPA didn't change me over to itemized deductions, she said it was because it still didn't make a difference, even with the mortgage interest. I got home and, just to satisfy my own curiosity, filled out the itemized deduction sheet. I was surprised to find that not only was she absolutely right, but that it wasn't even close.

Then again, I bought that house for $137,500 in 2017 when interest rates were still at record lows. I imagine the interest on my current house, which I bought in December, is high enough it might materially affect my 2025 return.

Quote from: Rothman on April 17, 2025, 08:56:59 PM

Quote from: Scott5114 on April 17, 2025, 08:14:23 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AM

Quote from: kphoger on April 17, 2025, 11:03:57 AM

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

It isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

That alone would be a massive improvement. The majority of people don't need to itemize because the standard deduction would be larger than the sum of their itemized deductions.

Hell, I have a small business and while that adds all sorts of schedules and attachments, I still take the standard deduction.

A sad statement on the level of home ownership.

I think its just that most people don't have as much mortgage interest given the higher standard deduction.

I wasn't even close to hitting the standard deduction even with a mortgage payment.

Quote from: SEWIGuy on April 17, 2025, 01:28:02 PM

Quote from: vdeane on April 17, 2025, 12:58:01 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AMIt isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

Given how much information banks report to the federal government (to the point where many banks outside the US refuse to open accounts to people with American citizenship), they probably do know all that.  In fact, I've been reading this year that pretty much every electronic transaction gets reported to the IRS (certainly anything involving banking/ACH, but possibly even credit card transactions).

I'm sure the transaction is reported. Does tht IRS know how much of my mortgage payment is principal, interest and escrow? And what the escrow is for?

Back when I still had student loans, I'd get a form 1098-E every year detailing the interest.  I can't imagine mortgages are much different on this.

Quote from: SEWIGuy on April 17, 2025, 09:18:17 PM

Quote from: Rothman on April 17, 2025, 08:56:59 PM

Quote from: Scott5114 on April 17, 2025, 08:14:23 PM

Quote from: SEWIGuy on April 17, 2025, 11:56:42 AM

Quote from: kphoger on April 17, 2025, 11:03:57 AM

Quote from: Scott5114 on April 16, 2025, 08:49:37 PMThe really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about ...

It's incredible how commonsense that is.

Other than corporate insurance plans, is there any other situation in which the 'customer' has to figure out for himself what amount the 'company' should invoice him for?

It isn't commonsense in a taxation system where you have so many deductions. The IRS doesn't know what my mortgage interest is. They don't know how much I have contributed to my IRA, paid in student loans, etc. etc.

I guess what they could do is send you a "here's what you owe if you took the standard deduction," and then you would need to log into a system to itemize or something. That would be roughly akin to a customer asking for a rebate.

That alone would be a massive improvement. The majority of people don't need to itemize because the standard deduction would be larger than the sum of their itemized deductions.

Hell, I have a small business and while that adds all sorts of schedules and attachments, I still take the standard deduction.

A sad statement on the level of home ownership.

I think its just that most people don't have as much mortgage interest given the higher standard deduction.

Not to mention that the state/local tax deduction has been capped for close to a decade now.

*has proudly beaten the standard deduction for more than over a decade*

<.<

>.>

*spends too much money for the tax benefits gained*

Regarding the standard deduction versus the itemized deduction, remember that there are a lot of people who used to itemize who now take the standard deduction because of the 2017 amendments to the tax code. The cap on deducting state and local taxes on your federal return, in particular, took away a lot of the advantage to itemizing for a lot of us. This is one of those things that would be less obvious to people who live in states that don't impose their own income tax, although the deduction wasn't limited to income tax. You could deduct income tax, real estate tax, and personal property tax based on the value of the property, to give three examples. But the 2017 tax law capped the deduction at $10,000.

I haven't itemized since then, but I still record all the data all year because of the possibility that something unexpected might happen in a given year to make itemizing advantageous that year. (TurboTax does the work of figuring out which is better, so I enter the data in the interest of verifying what I already know.) Candidly, a major advantage for me to taking the standard deduction has been that getting my wife to be conscientious about giving me the information when she donates to charity or has a medical bill or whatever has always been like pulling teeth. She never itemized before we were married, so she never thought about keeping track of that stuff for tax purposes and it wouldn't occur to her to tell me the amounts so I could put them in my spreadsheet and save any receipts. I'm sure we missed out on a few hundred dollars of itemized deductions over the years. Regarding the medical bills, those are the classic example of tracking just in case—you hope never to be in a position to deduct those because if you are, it means either you had a lot of medical expenses that year or your income was extremely low.

I haven't needed to itemize for a few years before 2017. I loosely keep track of what would be itemized, but I'm so far removed from the threshold it's not much of a thought at tax time.

The threshold for deducting medical expenses is so high that they didn't even make a difference when I went through a nine week chemotherapy treatment.

Quote from: Rothman on April 18, 2025, 09:19:59 AMThe threshold for deducting medical expenses is so high that they didn't even make a difference when I went through a nine week chemotherapy treatment.

The one time I was able to deduct them was in 2009 because I was out of work that year and had fairly minimal income, but I decided to milk the COBRA coverage I had for all it was worth (understandable, in my view, given how expensive it was). That was the year when I first started wearing eyeglasses and when I was diagnosed with sleep apnea. So relative to my income, the copays and deductibles added up to enough where I was able to deduct them.

But yeah, your point about "the threshold is so high" is why I said I hope never to be in a position to deduct them because it means something bad happened. I believe prior to the 2017 amendments the threshold was 7.5% of adjusted gross income and I think it's 10% now.

Quote from: vdeane on April 17, 2025, 09:32:29 PMBack when I still had student loans, I'd get a form 1098-E every year detailing the interest.  I can't imagine mortgages are much different on this.

Right. It's the same. Its information provided by the lender (or servicer in the case of student loans). It's not information that the IRS already knows. Now *could* it be if we had an automated way of doing so? Sure. But no one seems motivated by that.

Quote from: SEWIGuy on April 18, 2025, 09:48:16 AM

Quote from: vdeane on April 17, 2025, 09:32:29 PMBack when I still had student loans, I'd get a form 1098-E every year detailing the interest.  I can't imagine mortgages are much different on this.

Right. It's the same. Its information provided by the lender (or servicer in the case of student loans). It's not information that the IRS already knows. Now *could* it be if we had an automated way of doing so? Sure. But no one seems motivated by that.

If it's on the form, wouldn't it be in the stuff the bank reports to the IRS?  Or is your level for "knows" "an employee specifically looked at this and audited it" and not simply "the IRS has the information on file"?

Quote from: vdeane on April 18, 2025, 10:25:26 AM

Quote from: SEWIGuy on April 18, 2025, 09:48:16 AM

Quote from: vdeane on April 17, 2025, 09:32:29 PMBack when I still had student loans, I'd get a form 1098-E every year detailing the interest.  I can't imagine mortgages are much different on this.

Right. It's the same. Its information provided by the lender (or servicer in the case of student loans). It's not information that the IRS already knows. Now *could* it be if we had an automated way of doing so? Sure. But no one seems motivated by that.

If it's on the form, wouldn't it be in the stuff the bank reports to the IRS?  Or is your level for "knows" "an employee specifically looked at this and audited it" and not simply "the IRS has the information on file"?

I was under the impression that mortgage holders don't report 1098s to the IRS. Just provided to the mortgage holder. I was wrong about that.

Quote from: Rothman on April 18, 2025, 09:19:59 AMThe threshold for deducting medical expenses is so high that they didn't even make a difference when I went through a nine week chemotherapy treatment.

Yep.  A major surgery and about five chemo treatments didn't put me over the threshold either.

Quote from: Rothman on April 18, 2025, 09:19:59 AMThe threshold for deducting medical expenses is so high that they didn't even make a difference when I went through a nine week chemotherapy treatment.

Best to think of that as a very high deductible health insurance plan administered through the tax code.

Quote from: kernals12 on April 18, 2025, 05:15:38 PM

Quote from: Rothman on April 18, 2025, 09:19:59 AMThe threshold for deducting medical expenses is so high that they didn't even make a difference when I went through a nine week chemotherapy treatment.

Best to think of that as a very high deductible health insurance plan administered through the tax code.

The only time I was able to get a benefit for medical expenses on my tax return was in 2010 after I was hit by a car (while running).  Having to surgically plate repair a left arm and the accompanying rehabilitation therapy barely pushed me over the threshold where I could get a deduction.