Taxes

[Minnie404]

Did anyone get a much lower refund this year then compared to last year. Last year hubby and I got around 5000 back from federal this year only 1200. My mom is an accountant and she said we wouldn't get as much back this year but I wasn't expecting it to be like that. She said we did make more this year. Hubby and I both claim 0 for our checks but we have two kids. We have a house and our taxes and mortgage interest is pretty high so I just can't figure out why it is less then half of what we got back last year. Just wondering if this happened to anyone else this year.

 

[supersnoop]

Look at how much you owed in taxes last year versus this year. Nobody here will know if you had more or less withheld from your pay checks, or if you owed more money this year. If your income increased, you may have exceeded the limits to claim some credits and deductions.

 

[Luscien]

Ours was just about the same. We would have owed if it weren't for my wife going to school, however we also don't have kids, so we don't have those additional deductions.

 

[4HppyCamprs]

We owed for the first time in 9 years.

Sent from my iPhone using DISBoards

 

[Allison]

You can't just compare the refund amount from year to year. That's pretty meaningless. You need to look at your return so you can see your earnings and the taxes owed.

 

[lost*in*cyberspace]

Refund? I wish! We owe, for both state and federal taxes, for the first time ever; an amount which I can hardly believe! Between military retirement pay and income earned being self-employed, we didn't pay nearly enough estimated tax. Lesson learned for next year, we now have a financial planner.

 

[havaneselover]

Well giving the government a $5K interest free loan isn't a great idea IMO. I'd rather have an extra $400/month in take home pay.

Refund = Taxes paid - Taxes owed. Lots of things impact both taxes paid and taxes owed.

I know my brother and SIL unexpectedly owed $8k last year It was her first full year at her new job (40% raise from previous job). They planned poorly. At the beginning and middle of the year I estimate what I will owe based on: projected income, projected interest income, state tax refund, property tax, state income tax, mortgage interest, personal property tax, c child tax credit, and projected charitable giving. I make sure I'm paying enough. I never am surprised. My taxes are relatively straight forward, but I never understand how people have big surprises. Especially when tax rates really haven't changed much for most of us of late.

 

[kerplop]

Yeah, but it wasn't a big change. Usually we get about $700 back and this year we got $350. Ideally you want to get nothing back and not owe anything either! So we're still happy.

 

[Swimalie]

Ours went down a few hundred this year. We also brought in a lot less in income but our mortgage interest amount went down as well so we figure that's where the lower refund came from (and it wasn't much at all).

 

[lost*in*cyberspace]

....... I make sure I'm paying enough. I never am surprised. My taxes are relatively straight forward, but I never understand how people have big surprises. Especially when tax rates really haven't changed much for most of us of late.

I can see how people are surprised in a year where their income changes radically, as ours did after my husband retired. We didn't realize his consulting business was going to make so much money, especially in the last few months of 2013, on top of his retirement pay, so did not pay enough estimated tax. We won't make that mistake next year!

 

[robsmom]

We owe significantly more than last year. Google tax changes for 2013 and you will find that our government made a lot of small changes. They did not get a ton of publicity but have raised taxes. OP - you really want to compare line by line from year to year to see what the differences are and make sure that they are correct. One big area is that eliminations used to be allowed for each person. They are now subject to income limits. There is also a new medicare penalty, increase in AMT and further tightening of deduction limits. In our case, 2013 was a good stock market year so we had significantly more gains. I suspect many people with Investments had this issue in 2013.

 

[robsmom]

We owe significantly more than last year. Google tax changes for 2013 and you will find that our government made a lot of small changes. They did not get a ton of publicity but have raised taxes. OP - you really want to compare line by line from year to year to see what the differences are and make sure that they are correct. One big area is that eliminations used to be allowed for each person. They are now subject to income limits. There is also a new medicare penalty, increase in AMT and further tightening of deduction limits. In our case, 2013 was a good stock market year so we had significantly more gains. I suspect many people with Investments had this issue in 2013.

 

[StephMK]

You need to compare returns from last year to this year to see where the big differences are. How old are your kids? Did daycare change? Did a kid turn 17? If the pay was significantly higher, that could make a difference too.

When I do my taxes online, it shows me a breakdown that compares it to last year so I can see if appears to be in line.

 

[Minnie404]

Thanks Everyone! I know it is not ideal to get $5000 back each year but I have done it that way in the past so we can use it has savings and either use the money for vacations or projects around the house. I'll have to look at the last couple of years tax returns and compare it to this year. Just really sucks when you are expecting something higher and it was so low. I'm glad we don't owe but if we both claim 0 you would think we would be getting back more then what we do.

 

[MillauFr]

I can never figure it out. I owed $3,000 last year and $5,000 this year. It always seems to change even though my pay is about the same.

 

[tvguy]

Our income and our tax bill and our tax refunds are almost identical to last year.
But have few deductions, house has been paid off for 14 years, so no mortgage interest.

I will say, the withholding tapes are useless for us. Always have been. We used to have a specific percentage withheld instead of using the tables, you can't do that anymore. We either get a big chunk back, or if we adjust the withholding, owe a big chunk. Percentage withholding was much closing to our actual final tax liability.

 

[JoiseyMom]

Ours went down, but we didn't have as much as a child tax credit, that went down HUGE and DH went up a tax bracket.

 

[dreamin_disney]

We got back a little less than last year. Our daughter is 15 and tax lady said something about this or next year being last time getting credit for her. And that the IRS or Obama is trying to get everyone to go short form something about less deductions. Dh knew what she was talking about and he said next year will be worse thanks to Obama ??? I'm just happy we don't hv to pay back!

 

[amcnj]

If you have taxes taken by your employer, and wages did not change much this year, then some of the new tax changes may have applied and/or deductions or other income might have changed. A common way to quickly run up the tax bill is for investments to have paid higher dividends or capital gains than in the previous year. Such income typically does not have federal tax withheld so the added income can cause big changes in what you owe.

 

[okeydokey]

We got back more this year. The standard deduction actually increased a bit this last year and we got a credit for energy savings AC unit and water heater installed.