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#572047 - 01/23/19 12:44 PM Income Tax estimator  
Joined: Jan 2003
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Justification Online content
Admiral
Justification  Online Content
Admiral

Joined: Jan 2003
Posts: 3,849
Fruit Heights, Utah
Big tax changes this year and don't have any idea as to how it's going to work out yet.
Probably don't stand a chance of going over the new standard deduction. The aging of our kids effectively makes us empty nesters for Tax purposes, but the expenses of having kids at home hasn't changed anything there.
My tax accountant has been amazing so we'll use him again this year, but maybe not going forward. Depends on what he comes up with as data comes in from our investments.
Is there a legitimate Tax estimator online that you use, before we go see our accountant to prepare us for the worst.


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#572051 - 01/23/19 09:12 PM Re: Income Tax estimator [Re: Justification]  
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captkevin Offline
Admiral
captkevin  Offline
Admiral

Joined: Oct 2003
Posts: 7,537
Chicago, IL
In the same boat here. Send everything to the accountants & wait for the good news.


2004 Rinker 232
2010 Dodge Ram Crew Cab Laramie 4x4
#572062 - 01/24/19 02:07 PM Re: Income Tax estimator [Re: Justification]  
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GoFirstClass Offline
Retired Boating Bum
GoFirstClass  Offline
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Grand Poobah

Joined: Nov 2003
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Pasco, WA
That's what we do. I gather the info, meet with the tax guy and he mails me the results. We're pretty close to even-steven with the govt when we file.


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#572185 - 02/21/19 06:18 PM Re: Income Tax estimator [Re: Justification]  
Joined: Dec 2003
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athiker Offline
Admiral
athiker  Offline
Admiral

Joined: Dec 2003
Posts: 3,881
Lake Norman, NC
I would probably trust the accuracy this one as much as any....it's pretty detailed as it is a lead in to sell you TurboTax. It leads you through a Q&A step-by-step. It even lets you edit the numbers (look down at the bottom) when you are done to see different scenarios.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster

I'm seeing a lot articles about people being upset about getting a smaller refund this year (even though it's because they had less withheld during the year due to withholding changes). My taxes tend to be a little complicated so I've used an accountant for years. What has been fairly accurate for me is to simply look at my average tax paid in previous years, not the the tax bracket, but simply tax paid divided by income to get an idea of what the current year's liability bill will be. Obviously however if you dramatically changed brackets or had major life changes this will be off...plus this year its a whole new ball game for most including me.

Being self-employed I have to pay quarterly estimated taxes. The rule has been during the year you must pay 90% of taxes owed in the current year or 100% of previous year's tax if you make up to $150k or 110% of previous year's tax if you make over $150k then you won't be penalized. Obviously when you file you have to pay any additional if your income increased or you will be due a refund if your income declined from the previous year with the 100%/110% method.

Being self-employed as part of a "pass-through" Subchapter S business this year is really fun. So much for filing my taxes on that postcard Paul Ryan held up! To prevent a million small businesses from converting to a C corp when they lowered the corporate tax rate for them they stuck in a 20% income deduction for pass-through entities like Sole Props, Partnerships, LLCs and Subchapter S corporations. It applies only to business income...NOT salary....actually not all business income only QUALIFIED business income (QBI).

Of course ALL pass-through entities do not qualify either! There are income (all income, not just business income) thresholds above which the "nature" of your business comes into play, there are phase outs for even qualifying businesses...all kinds of full-employment for accountants details to figure out. Fortunately we do qualify in general, but the whole thing is a freaking joke as far as "tax simplification" goes. The IRS didn't even finalize the rules until late January....January 2019!...for 2018 tax year. Really helpful for 2018 business decision planning.



2000 Cobalt 206 5.7L EFI Alpha 1
#572186 - 02/21/19 06:45 PM Re: Income Tax estimator [Re: Justification]  
Joined: Dec 2003
Posts: 3,881
athiker Offline
Admiral
athiker  Offline
Admiral

Joined: Dec 2003
Posts: 3,881
Lake Norman, NC
Here are a few sentences of explanation in case anyone needs more detail on the pass-through deduction. Make sure you have a cold one....or rather a 6-pack handy before you start reading. smile frown facepalm

https://www.forbes.com/sites/anthon...on-putting-it-all-together/#2b916c64d9f0

P.S. If anyone knows an amazing accountant in the Charlotte, NC area please let me know. Having had a few, I think ours is pretty good but would love to have an amazing one...I'm sure they are out there...somewhere.


2000 Cobalt 206 5.7L EFI Alpha 1
#572212 - 02/28/19 01:29 AM Re: Income Tax estimator [Re: Justification]  
Joined: Feb 2003
Posts: 11,787
Frantically Relaxing Offline
Admiral
Frantically Relaxing  Offline
Admiral

Joined: Feb 2003
Posts: 11,787
Self-employed, and have done our biz taxes via Turbotax for 20-ish years now. Our income/deductions starts on the biz end, being a partnership the biz itself makes no money, biz income less biz deductions equals our personal income.

The big bite is self-employment tax, which is basically FICA x2, which is IIRC about 13.5% right off the top. However, that money is (supposed to) be added to our SS accounts, so...

For the past several years, due to our low interest home loan and the balance, and the fact we don't have enough medical to help, or enough second-home interest to help, we've been standard deduction. So it's a given we'll be again this year. What I'm interested in is the actual tax rates and the brackets compared to years past. If they haven't changed, then we'll likely be better off than usual due to I bought a couple of new machines that'll be 179'd.

Guess I could find the tax rates if I looked, just haven't yet...

edit-- ok, just looked! wink --easier to just post up screenshots-- at first glance, tax rates look promising at least for our situation, from 15% to 12%, I'll not complain..

[Linked Image]

[Linked Image]


Last edited by Frantically Relaxing; 02/28/19 01:55 AM.

[Linked Image]
#572214 - 02/28/19 09:52 AM Re: Income Tax estimator [Re: Justification]  
Joined: Jan 2003
Posts: 3,849
Justification Online content
Admiral
Justification  Online Content
Admiral

Joined: Jan 2003
Posts: 3,849
Fruit Heights, Utah
It's in the accountants hands now, and our conversation as we dropped off the paperwork wasn't too soothing.
Our marginal tax bracket has dropped, but the loss of the personal exemptions and employee business expenses and the SALT cap looks like it has more than offset the increase in the standard deduction.
Our effective tax rate has been creeping up over the last few years and his comment of "I'm going to have to really sharpen my pencil on this one" as he glanced at our income compared to last year makes me think we're in some real trouble.
Since all the media hype is "refunds are down" this year instead of focusing on what has happened to the typical total tax bill I'm still not sure what is going to happen.
Tax withholding tables changed, which reduced how much was withheld over the year. Those tables make each of my income streams think I'm withholding enough, not realizing that combining them means we're in a higher bracket, so even withholding at the single rate with an extra amount added probably aint gonna be enough. Better to pay a couple hundred on April 15th and have use of my money over the year than give an interest free loan to the gubmint, but having to pay a few thousand is gonna be painful.


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#572215 - 02/28/19 01:40 PM Re: Income Tax estimator [Re: Justification]  
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Jack T Offline
Admiral
Jack T  Offline
Admiral

Joined: Jan 2003
Posts: 3,885
Southern California
"Our effective tax rate has been creeping up over the last few years...."

Just wait until you officially retire and you have to take Required Minimum Distributions (RMDs) after age 70 1/2. You will see the $$ you have worked so hard for being taxed as income. It's like pouring money down the drain.

Here's the IRS page on the subject.
https://www.irs.gov/retirement-plan...pics-required-minimum-distributions-rmds


Have a great day of boating
2012 Monterey 224 FS,
300 HP Volvo Penta with catalytic converters

#572216 - 03/01/19 01:43 PM Re: Income Tax estimator [Re: Justification]  
Joined: Feb 2005
Posts: 1,950
jtheile Offline
Admiral
jtheile  Offline
Admiral

Joined: Feb 2005
Posts: 1,950
North Ridgeville, Ohio
Originally Posted by Justification
Our marginal tax bracket has dropped, but the loss of the personal exemptions and employee business expenses and the SALT cap looks like it has more than offset the increase in the standard deduction.
.


The loss of the deduction for the difference between the per diem received and what the govt allows hit our taxes pretty hard.


Joe
Four Winns 225 Sundowner
#572217 - 03/01/19 04:55 PM Re: Income Tax estimator [Re: Justification]  
Joined: Dec 2003
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athiker Offline
Admiral
athiker  Offline
Admiral

Joined: Dec 2003
Posts: 3,881
Lake Norman, NC
I haven't submitted everything to the accountant yet, but one of our employees told me her family is getting whacked quite hard with unexpectedly owing thousands instead of their usual rebate. She does graphics and other work for us and upped her hours by about 10 more hours per week this year vs last. Which is great for the extra income, its not like they ended up with less money to spend, but like Justi indicated, since they are a dual income family her withholding was way low, especially after the tax changes. She just asked me to lower her deductions from 4 to zero going forward.

It was such a major tax change that withholdings got messed up for a lot of people it seems...some predictable and some not so easily. 2019 should be more predictable.


2000 Cobalt 206 5.7L EFI Alpha 1
#572219 - 03/01/19 06:58 PM Re: Income Tax estimator [Re: Justification]  
Joined: Oct 2003
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captkevin Offline
Admiral
captkevin  Offline
Admiral

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Chicago, IL
Gave ours to the accountant today. Fingers crossed hoping for good news.


2004 Rinker 232
2010 Dodge Ram Crew Cab Laramie 4x4
#572222 - 03/02/19 06:03 PM Re: Income Tax estimator [Re: Justification]  
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Frantically Relaxing Offline
Admiral
Frantically Relaxing  Offline
Admiral

Joined: Feb 2003
Posts: 11,787
Since I pay quarterly taxes plus do all the taxes and book-work around here, I pretty much always know where we stand. Simply because our taxable income rate dropped 3% we should be a bit better off, except for the fact biz gets better every year, this year was no exception. But, I add to the estimated payments to account for that so no big surprises. Had more expenses this year, had to buy 3 new machines to keep up with the work load, those will offset the extra income somewhat.

As to all the weird tax crap I'm reading above, we have none of that. No IRA's, no investments of any kind. About 3 times in my adult life I've tried saving for retirement, market crashes and greedy dot-commers put my net gains at around minus 60%. Only saving grace was they got my money before there was very much OF it. I have a history of being very unlucky at gambling, of any kind, so a long time ago I just gave up... 2008 came and went and I didn't lose a dime on that one. Score 1 for me. Finally... wink

Our biz is a partnership, ultra simple: collect money, deduct for tools, machines, materials, repairs, utilities, etc., what's left over is gross income. We don't have enough personal deductions to itemize any more, we've been short form the past 2 years, that's not going to change this year...

#572226 - 03/03/19 07:02 PM Re: Income Tax estimator [Re: Justification]  
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Frantically Relaxing Offline
Admiral
Frantically Relaxing  Offline
Admiral

Joined: Feb 2003
Posts: 11,787
ok, so 2017 was a BIG increase over 2016, and we were were pretty light come tax day, more than usual. This years sales were up too, but bought some machines I 179'd. In doing a first-draft run-thru of our personals, our T-I is virtually identlcal to last years, only $6 difference. But our tax due is substantially less. Between the lower tax rate, higher std deduction and whatever else is in play (lots of weird new things in TurboTax this year), the tax savings paid for a good portion of the new machines! --I still have to write a check, but it's half as big as last years! So I'm not complaining...


[Linked Image]
#572233 - 03/07/19 03:21 PM Re: Income Tax estimator [Re: Justification]  
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tpenfield Offline
Admiral
tpenfield  Offline
Admiral

Joined: Aug 2005
Posts: 2,349
Cape Cod, MA
I'm in the dog house this tax year. The Admiral does our taxes using TurboTax, and had initially estimated that we would get a substantial refund. However, when all was said and done, I neglected to mention that we sold some stock earlier in the year, and the cap gains tax pretty much took care of the supposed refund facepalm

I would like to take our data for the 2018 tax year and run it through the 2017 tax program to see how much of a difference the new tax law made. Probably could do the 2017 data in the 2018 program as well to see that comparison. idn


Regards, Ted

Formula 330SS

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#572236 - 03/12/19 11:46 AM Re: Income Tax estimator [Re: Justification]  
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On Holiday Offline
Daddy
On Holiday  Offline
Daddy
Admiral

Joined: Aug 2004
Posts: 6,481
PA and Smith Mountain Lake
Any money you get back in the form of a refund is money you gave the government to use for free. The best is to have the refund as close to zero as possible. At least now with the capitol gains expenses you don't have to take it out of your savings.


2008 Honda Goldwing Trike
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#572245 - Yesterday at 09:55 AM Re: Income Tax estimator [Re: Justification]  
Joined: Jan 2003
Posts: 3,849
Justification Online content
Admiral
Justification  Online Content
Admiral

Joined: Jan 2003
Posts: 3,849
Fruit Heights, Utah
Well I just got the news from my accountant.
The good news is the check I'm going to have to write is less than I had budgeted.
The other good news is our AGI is 6.2% more than it was last year.
The bad news is The gubmint continues to love us and has us in the doughnut hole of those who are neither rich enough to pay less taxes nor poor enough to not pay taxes at all.
while we made 6.2% more in 2018 than 2017, our tax bill is 6.8% higher.


Beer makes you feel the way
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#572246 - Yesterday at 12:22 PM Re: Income Tax estimator [Re: Justification]  
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captkevin Offline
Admiral
captkevin  Offline
Admiral

Joined: Oct 2003
Posts: 7,537
Chicago, IL
We are in the same boat. Have not got the official findings yet. Getting nervous. Our refund has been declining every year for the last 5 years or so. We used to get a nice return. Less than half of what it used to be. One of the rewards of working hard & making more money I guess.


2004 Rinker 232
2010 Dodge Ram Crew Cab Laramie 4x4
#572247 - Yesterday at 02:14 PM Re: Income Tax estimator [Re: Justification]  
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Jack T Offline
Admiral
Jack T  Offline
Admiral

Joined: Jan 2003
Posts: 3,885
Southern California
"Less than half of what it used to be. One of the rewards of working hard & making more money I guess.:

Working hard and making more money to just pay more taxes is not necessarily true. It boils down to money management.

Lots of variables here from one return to another--only a tax preparer or tax attorney can give you legally responsible advice. If you are getting less return, it is because you are doing a better job of withholding the right amount. As said above, it is best to come out near $0 than get a refund--no growth except your input--and it is your choice. Have you ever considered putting the $$ in a simple interest bearing account rather than giving it to the government and earn nothing? I think you would be surprised how well this would work for for a majority of people who depend on a return each year.

At age 70 1/2 , it all becomes much more tricky because of Required Minimum Distributions, which really roils the calculations.


Have a great day of boating
2012 Monterey 224 FS,
300 HP Volvo Penta with catalytic converters

#572248 - 31 minutes ago Re: Income Tax estimator [Re: Jack T]  
Joined: Jan 2003
Posts: 3,849
Justification Online content
Admiral
Justification  Online Content
Admiral

Joined: Jan 2003
Posts: 3,849
Fruit Heights, Utah
Originally Posted by Jack T
"Less than half of what it used to be. One of the rewards of working hard & making more money I guess.:


If you are getting less return, it is because you are doing a better job of withholding the right amount.

At age 70 1/2 , it all becomes much more tricky because of Required Minimum Distributions, which really roils the calculations.


The other thing that changed the "refund" was the rewriting of the withholding tables. When the new tables came out early in 2018 I noticed a drop in FITW with a slight increase in take home pay. I was worried enough about it that I redid my W4 to withhold an additional amount in addition to our already married, but withhold at the single rate. Had I not done that a VERY painful check would have been sitting on my desk waiting til April 14th to be mailed instead of an extremely annoying check to have to write. But i also increased how much I was paying on my mortgage, which was much more profitable in decreased interest payments, than the interest free loan to the gubmint, or the bloodbath I took in the Market in Dec.

Originally Posted by Jack T
At age 70 1/2 , it all becomes much more tricky because of Required Minimum Distributions, which really roils the calculations.

got many more years before I have to worry about that, but what do you do about paying tax on those withdrawals? Quarterly payments, or just wait til April to settle the score?


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You should feel without beer.

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