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Author Topic: News Media Reporting on Federal Tax Refunds  (Read 1067 times)

Offline furu

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News Media Reporting on Federal Tax Refunds
« on: April 08, 2019, 08:19:26 PM »
Just curious how you guys view/think about tax refunds

Back about 45 days ago there was massive  news reporting, both national and local, that new IRS released data showed the average refunds were radically reduced and that it was definitive proof that last years tax law changes were a failure and hurt the average American taxpayer, specifically the middle class.
There was little reporting on the fact that the IRS withholding tables had been modified and more accurately reflected the actual tax liability so that folks did not have excess withholding accomplished unnecessarily.

Then about three weeks later the IRS reported that the average tax bill for most middle class tax payers was in fact reduced.  That was reported very lightly by the media and they did not mention that most folks actually were paying less taxes.

This evening the national news was reporting again that the average refund for taxpayers was less than it has been for years.  The same refrain as 45 days ago.  Their proof was now supported by actual real numbers, not some vague comment.  The actual real numbers was that the average refund national wide is a whopping average of $20 less refund than in past years.  No mention at all that the actual total tax liability was either up or down for the same income.

Now my questions

Do you want a refund each year?  (Having supplied the government a free loan but getting a chunk of money back in April that you can use at that time)
Do you want to actually have to pay a small tax bill? ( Must plan to have the money to pay the IRS in April of each year)
Does the size of a smaller refund make you think you got screwed?
Does the size of your refund make you think you need to adjust your withholding (either up or down)?
Do you care at all other that it is a PITA no matter how you look at it?
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Offline bandmiller2

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Re: News Media Reporting on Federal Tax Refunds
« Reply #1 on: April 09, 2019, 04:39:05 AM »
You will never hear the news media say anything good about our president or any of his programs. We got more back but at the end of the year its a wash more or less. Frank C.

Offline Cutting Edge Saw Svc.

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Re: News Media Reporting on Federal Tax Refunds
« Reply #2 on: April 09, 2019, 06:47:43 AM »

The way it was explained to me and I'll do my best to be as accurate/brief as possible....

We did get a tax break from the new administration, a significant one, that would have increased our return compared to past years.


BUT, the IRS changed the rates on their end which negated ALL and more of any "tax break" expected for 2018.  We were informed to increase our withholding by SEVERAL percent for 2019 to at least be at break even, MAYBE to the good.

Bout time for the IRS themselves to be audited on a MASSIVE scale, IMO.   >:(

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Offline Ox

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Re: News Media Reporting on Federal Tax Refunds
« Reply #3 on: April 09, 2019, 07:39:13 AM »
At this point President Trump could find the cure for cancer and the lying left wing media would twist it around to where it was bad.  So no surprise there when they try to say his administration's tax changes are bad or evil and are "hurting" the average American.  One cannot believe a single word from them.  They've been proven liars numerous times so how can one ever believe anything they have to say ever again?  I think the liberals LIKE being lied to and living a fake life.  ::)

As far as our situation here, we hardly noticed any difference in take home pay and hardly noticed any difference in our tax returns.  As you stated furu, it's within a small margin the change we saw.

We have claimed 0 on withholding for 20 years now.  It is our forced way of saving money for the year.  I understand we could likely make a little more by investing it or whatever, but we are comfortable with letting our money get "used" for whatever purposes throughout the year by the government.  At least nobody can call us unpatriotic I suppose.  It's good to get a small wad of money in late winter/early spring for projects, vehicles, and/or paying off debt.  Just recently I've been able to pay off the wife's college loans after 2 years of saving.  All that's left now is the mortgage.  It's almost like a tradition now and we likely won't change this any time soon, but one never knows.  After all, the one thing that stays the same is everything changes.
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Offline A.O.

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Re: News Media Reporting on Federal Tax Refunds
« Reply #4 on: April 09, 2019, 09:19:45 AM »
I agree with it being nice to get a lump sum of my money back at the end of the year, we will continue to do things as normal to that end. As far as did we get more or less this year... about the same as normal. As far as the "average" going down by $20... our refund varies by more than that EVERY year, it always has! we make more we make less, more or less deductions etc. I cannot believe anyone gets exactly the same every year. Yes I believe we have gotten more on each check lately, but a lot of things have changed for us over the last couple years so its hard to tell.

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Offline furu

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Re: News Media Reporting on Federal Tax Refunds
« Reply #5 on: April 09, 2019, 02:30:33 PM »
My search for further clarity on your comments are inserted in red


We did get a tax break from the new administration, a significant one, that would have increased our return compared to past years.
By "return" I assume you mean refund or a return of your withholding


BUT, the IRS changed the rates on their end which negated ALL and more of any "tax break" expected for 2018.
The tax rates were established by Congress (i.e the law itself)  I presume that you mean the withholding rates in the withholding tables.

 We were informed to increase our withholding by SEVERAL percent for 2019 to at least be at break even, MAYBE to the good.
"To break even" I presume you mean to have withholding equal to projected tax liability or to exceed that projected tax liability (i.e. some refund; no additional payment required)

Bout time for the IRS themselves to be audited on a MASSIVE scale, IMO.   >:(
YES that is true

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Offline furu

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Re: News Media Reporting on Federal Tax Refunds
« Reply #6 on: April 09, 2019, 03:21:09 PM »
For twenty-five years in the military when I had a pretty consistent income (except when I got promotions) I let the withholding tables run as published and often had a minor refund each year.  I never really liked it but it was such a royal pain in the military to actually change withholding easily.

Since my retirement from the military and probably due to the ability to electronically easily make changes, I have found that I can adjust withholding on a monthly basis if I choose. (I don't do that however)
Thus I have for the last several decades (yes I am old) tried to never have a refund.  It grinds my jaws to give the IRS/Uncle Sam a free loan.  They don't pay me interest if I over withhold, on my refund, but if I under-withhold I have to pay them interest and possibly even penalties.

My current job does not have a real consistent pay on a month to month basis so it is hard to predict accurately exactly what I am going to end up with at the end of the year.  The withholding tables have never been that accurate but they seem to be way off since around 2000 or so not just from this last change.  I use the tables up until September then look at what I need to do for the next 4 months and add a little more each paycheck to meet the goal I describe below.
 
By law and IRS regulations if your under-witholding tax liability is less than $1000 there is not interest due nor penalty on the check you have to write out to the IRS on April 15th.  If the under-witholding tax liability is more than $1000 but your current tax year withholding is equal to or greater than the previous years total tax liability then no matter how much you owe you are interest/penalty free.  (there is a little more to it than that but not much)

Thus my goal is to always write out a check to the IRS on April 15th for $999.99.  I did pretty well for several years (decade plus) and was running right around my target goal.

This year I was at a loss as to what I should do.  One report would say that I would get a tax break and pay less.  Another report was that the middle class did not the get the tax break that was promised and that I would end up paying more than the previous year.  One chart said I would be in one tax bracket and the other would say a different tax bracket.  Very frustrating and very hard to get a straight answer as the target was always shifting.

Well after completing my taxes I have found I got a very significant tax break on what I pay compared to last year.  I apparently dropped into a lower tax bracket and even though I lost itemized deductions, the new standard deduction is larger and the Alternative Minimum Tax quit killing me.  I so far have found that it REALLY helped to reduce my taxes overall.

I continue to be amazed at just how the media keeps coming back to the refund issue.  Refunds mean nothing as to the amount of taxes that you pay.  Your total tax liability for the year is all that matters.  Your withholding is what impacts the refund that you get.  Each individual has complete control over that variable.  You have no real control over how much your total tax bill will be other than to stop working or to work more I suppose.

I started this post as I am always curious as to how folks view things and thus to understand and see how others perceive what is going on.  It is always of and remains interesting to me.

What would cause a tax revolution in this country is if every tax payer had to write a check out every month to pay their taxes and stopped the auto withholding which hides from most folks just how much of your hard earned income the government is taking each paycheck.
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Offline Cutting Edge Saw Svc.

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Re: News Media Reporting on Federal Tax Refunds
« Reply #7 on: April 09, 2019, 03:24:17 PM »

furu,

Yes, your presumptions are true.   

I ain't no tax expert, only recounted as best as I could what the accountant told us.

Regardless, it's B.S. how the financial institution(s) get to manipulate without, what seems to me, no checks-n-balances.


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Offline drobertson

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Re: News Media Reporting on Federal Tax Refunds
« Reply #8 on: April 14, 2019, 07:20:18 AM »
As with most news reportef, it's half news at best in my opinion, if half being true at all.  To that, our taxes were very near the same that they have been, the main reason is due to Obama care health,/ market place adjustments due to estimated income an actual,

Offline joasis

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Re: News Media Reporting on Federal Tax Refunds
« Reply #9 on: April 15, 2019, 06:12:54 AM »
My taxes were essentially unchanged, but my quarterlies are now lower. 

The yapping seems to be on the people who get paychecks and saw a modest increase in take home pay, and less of a refund....they forget quickly that they had more of their own money to spend each week, instead of waiting for Uncle Sugar to refund the interest free loan that the working class makes to the government.

I don't want to give the government anything that I am not obligated to, especially loaning them my money.
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Offline moodnacreek

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Re: News Media Reporting on Federal Tax Refunds
« Reply #10 on: April 16, 2019, 06:42:28 AM »
 There are many who pay no attention to their withholding tax [taken out of their pay]. but want a large refund every year. We cause our own problems because no one is hungry.

Offline furu

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Re: News Media Reporting on Federal Tax Refunds
« Reply #11 on: April 16, 2019, 11:01:00 AM »
I find not knowing where your money is or went, a rather confusing concept as it is too foreign to my way of thinking. 

It would never happen in our country as it is too embedded in the way things are done but as has been said by many before:

If we were to stop all automatic withholding of taxes, federal, medicare, social security, state, city and instead require folks to write a check the first Monday of November for the taxes that they owe we would see a completely different structure and methodology of government spending than we currently have.


Will never happen but many/most folks just have no idea how much they pay in taxes per year or even throughout their lifetime.  I have a really good idea of how much, as I pay pretty close attention as I detailed above.  What I found interesting was a feature in Quicken that showed up about a decade ago or so that shows a pie chart of all spending.  Now I have been using Quicken since it came out 30 years ago.  The first decade plus or so of my adult life are not in the file but EVERYTHING ELSE is. (yes I load and track just about everything, cash receipts, credit cards checks you name it, etc.) 
To see that pie chart of where spending has gone and to see the total taxes that have been levied upon my wages is just eye watering.  It brings things really to a head as far as understanding who you are really working to support and by what percentages.
Integrity is not just doing the right thing.
Integrity is not just doing the right thing when no one is looking.
Integrity is doing the right thing when no one else will ever even know.