Search the Community

So now that a year has come and go, folks are getting a chance to see the implications of the tax cuts. It's looking like, from the individual taxpayer side, it's not turning out like it was expected. https://finance.yahoo.com/news/trumps-tax-scam-some-taxpayers-get-unwelcome-surprise-after-filing-returns-201206749.html?.tsrc=bell-brknews While refunds aren't the whole issue and can be changed by several issues, here's some general observations as I delve into the tedious task of working on my annual taxes. These are specific to my situation ... your mileage may vary: Exemptions are gone. Caused some $28,000+ to disappear from consideration in lowering the taxable income. Yes, standard deduction went up, but only $12,000, so the net impact was more than $16,000+ to the negative ... not including the fact that I always had enough to itemize, so the impact ends up being more. Taxable income is up considerably this year despite making less total income. No changes in any lifestyle issues, etc., with the exception of one more kid in college, outside of the tax cut legislation. Increased tax credits for kids, but not anywhere close to make up for the removal of exemptions. Initial taxes, before deductions/credits was higher than last year despite making less total income. Refund this year will be, in absolute terms, substantially lower despite having an additional kid in college which should have had both the absolute and relative refund increase. Bottom line, at least for me, is I'm not seeing the direct positive impact that was promised and, in fact, are experiencing a negative hit. What I have noticed, in both my own and other anecdotal stories is that, at best, what most folks are seeing is that the paycheck increases that many folks saw was mainly a shifting of part of their year-end liability showing up in their paychecks. In other words, someone who would usually get back $2,400 in a tax refund, may well have seen a $100/month increase in take-home pay, but their refund is likely to end up being $1,200 or less. In other words, they didn't actually get a tax cut; just a tax shuffle. Just curious as to others' experiences.