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General discussion

The new W4 (tax form.)

Apr 9, 2019 10:15AM PDT

The IRS is floating a new W4 which may include:
- Nonwage income, such as interest and dividends
- Itemized and other deductions
- Income tax credits expected for the tax year
- For employees with multiple jobs, total annual taxable wages for all lower paying jobs in the household

Just what you don't want your employer to know.

Discussion is locked

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W4
Apr 9, 2019 1:51PM PDT

That's the IRS trying to straighten out the mess that Ryan's tax cut for the wealthy created.

Since most folks can't be bothered with following tax laws they either get a nice surprise at tax time or a shock at the amount they owe.

I would not want my employer knowing all that stuff.

It's up to me to adjust my withholding so that things kind of balance at tax time.

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I've not seen the proposed form but,
Apr 9, 2019 5:24PM PDT

to the best of my knowledge, the worksheet portion is what will change and it's never been a requirement to give that to an employer as it's clearly stated that the worksheet is for the employees records. In fact, I don't think it's ever been a requirement to fill out a new W4 other than to request an adjustment to withholding. Generally this is done as dependents are added or dropped. We'll see.

I know there was a lot of hoopla after some folks got smaller refunds this year (a few may have owed) but that's not the reality of new tax code. These same folks who are complaining probably saw larger paychecks with or without an actual salary increase. Otherwise, these refund checks are no better than giving the government an interest free loan over the past year. Some folks are determined to never run out of things to complain about.

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About lower refunds.
Apr 9, 2019 5:52PM PDT

I'm in California and the refund was lower. Mostly because of where we landed on deductions. I'll not write numbers but after factoring in salary increase it was 10% less compared to same numbers on 2017 rules.

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If you itemize deductions
Apr 9, 2019 10:19PM PDT

And you live in a high tax state you might find your federal taxable income went up because of the limit on SALT.

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Is that a bad thing?
Apr 10, 2019 2:04AM PDT

As well, is it a good thing to be able to afford life in a high tax state by shifting some of your tax liability onto people who don't? IMO, tax deductions should be afforded to those whose other spending alleviates the spending needed by the government. This will include some spending that's considered to be charitable. Funding the purchase of a larger home than necessary by deducting for mortgage and property tax payments is not proper, IMO. Those deductions were intended to allow home ownership to those who could not otherwise afford to do so. It shouldn't allow those who can afford a home to buy a larger one in more expensive neighborhood.

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SALT limit
Apr 10, 2019 8:53AM PDT

Depends which side of the fence your on.

States cities towns found it an easy way to raise money since people could deduct it from their fed taxes.

I don't think it's right that people from a low tax state subsidize people from a high tax state.

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I think you have something backwards
Apr 10, 2019 9:56AM PDT

If you're from a low tax state, the amount you can deduct from your federal taxes is less. Thus, if your income was the same, you'd pay more in federal taxes than you'd pay in high tax states. You'd be the one providing any subsidy. One would hope that a high tax state provided benefits to it's residents that made it worthwhile. One such benefit would be the ability to attract companies that offer high paying jobs. You don't want those who live in states without high paying jobs to make up for the tax deductions available to those in states where wages can be higher....or do you? This isn't different from buying name brand products versus the store brands. You pay more if you feel you're getting more.

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Let's say
Apr 10, 2019 11:33AM PDT

I live in a low tax state.
I make 100k/yr.
My SALT is 10k.
I pay fed taxes on 90k.

I live in a high tax state.
My SALT is 20k.
With the SALT limit of 10k I pay fed taxes on 90k.
I also paid an extra 10k to SALT.
It seems that living in a high tax state I would come out a loser.

The fed also gets more money to fund the gov.....maybe less borrowing which everyone is paying for.

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Yes...you could end up paying more to the fed
Apr 10, 2019 1:53PM PDT

but were you paying too little beforehand. You were deducting more than another person making the same wage in a lower tax state. All else being equal, that other person was paying more to the fed than you were. That other person was benefiting from lower state and property taxes. To me, it could sound that you both come out about even. Nothing to gripe about. Now...as to less of a refund, tell me which scenario is more favorable.

Lets say last year you got $1000 back but this year only $500.
Last tax year, your 100K wage had a withholding of 20K. This past year, the withholding was 18K. You got twice the refund the previous year. With which tax code are you happier?

Post was last edited on April 10, 2019 1:55 PM PDT

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SALT
Apr 10, 2019 3:00PM PDT

If you live in a state with a high SALT rate with unlimited fed deduction for SALT you get to shift that high SALT to the fed.

The fed did not like that so they set a cap on it.

Now you have to pay more fed taxes.

Tax code....if my weekly paycheck goes up 10 bucks but my tax refund goes down 500 bucks that's a wash.

The problem is people don't notice the 10 bucks but they do notice the 500 bucks.

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Some people can't or won't do the math
Apr 10, 2019 3:19PM PDT

They see a smaller refund and gripe without even looking back at their adjusted gross and withholding. Tax deductions can be a trap and the fed allows some of them based on common sense reasoning. Some deductions seem to have little or no reasoning behind them. And, tax payers can also be abusive of the deductions. IMO, those that also benefit the federal government's programs and relieve other taxpayers of some of the burden are justifiable. If someone gives money for legitimate and well run homeless and hunger programs, that's a good reason to allow a deduction. Such charities do something to alleviate the need for duplicate efforts by the government and, thus, save money for other taxpayers. If state taxes can do the same...that is prevent federal government duplication of the same services, I'd say that would be a legitimate reason to allow a higher amount of deduction from those state taxes. You're never going to make everyone happy. Some will gripe if taxes are lowered and some if taxes are raised. It's an old tradition.

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When this tax cut for the wealthy got brought in
Apr 10, 2019 4:27PM PDT

Most taxpayers did not even look at it.

They just waited until tax time to see the results.

Some are happy some are carping.

In another 6 yrs we revert back to the old system and start the mess all over again.

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As soon as you mention
Apr 11, 2019 1:47AM PDT

that the tax cut was for the wealthy, you've said more in those few words than in all of the rest as you've announced your prejudice. Prejudice causes the lack of logical thinking. The brain gets stuck in one gear and the eyes never shift from their path to nowhere. Go ahead and have your gripe.

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It's not my gripe
Apr 11, 2019 2:26AM PDT

When the thing hit the light of day more than a few tax types labeled it as such.

That's not to say the little guy got nothing just not nearly the tax cut the wealthy got.

To sell it as a middle class tax cut and then skew it towards the wealthy seems a bit misleading.

I suppose trying to sell it as a wealthy tax cut with a little for the middle class would not sell very well.

If you want to walk around with blinders that's your business.

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Look at numbers yourself
Apr 11, 2019 4:06AM PDT

What you'll see is that there can be a big difference depending on whether or not a person looks at % or $$$. A person who earns more than another but gets the same % decrease will get more in dollars. Those who want to moan and gripe will look at dollars only but a 2% decrease for everyone still means the highest earners get more in dollars. Is that what bothers you? Maybe you'd rather the government just send everyone a $1000 regardless of their earnings. If we look at who pays the most, we'll still find that the highest earners pay a much greater % of actual cost of the services we all get. There's no way a person whose tax liability is minimal pays the actual cost of the services they get. There are plenty of ways to look at something like this but those blinded by prejudice won't past their own gripes.

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I don't look at dollars
Apr 11, 2019 5:11AM PDT

If it was a straight 2% across the board cut then the wealthy will get more dollars than the middle class.

The way this was set up was the middle class got 2% and the wealthy got 10% but it was sold as a middle class tax cut which it was.

But they failed to mention that 10% for the wealthy.

I would certainly expect someone making 100k to pay more dollars to fund the gov than someone making 10k.

Dollars are not a good way to measure.

You seem blind to the way this tax cut bill was skewed.

I don't gripe about it I just recognize it for what it was.....a con job.

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Look for yourself and do your own math
Apr 11, 2019 7:11AM PDT
https://www.investors.com/etfs-and-funds/personal-finance/how-tax-reform-impacts-your-tax-bracket-and-rate/

Try to find a 10% cut for the wealthy. If you use proper and not fuzzy math, you'll see that the midrange cut was in the area of 12-15% and the upper brackets was 6-7%.

Hint. A drop from 15% to 12% is not a 3% drop but a 20% reduction. Going from 39.6% to 37% is a change that rounds to about 6.6%. Of course, changes to bracket structures require additional math to figure out every possible scenario but it's fairly clear to me that lower and middle income people would benefit more.
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(NT) It's not just tax brackets.
Apr 11, 2019 12:31PM PDT
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It's not just tax brackets
Apr 11, 2019 12:48PM PDT

Post was last edited on April 11, 2019 4:25 PM PDT

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Site doesn't work but as posted
Apr 11, 2019 1:32PM PDT

You must have done a double copy/paste but I was able to remove the extra parts. But, these places have become little more than editorial and propaganda material. All I need to see is the verbiage in the link and the title of the article to know its value is suspect. I'm not about to use some news source as my best reference. We were born with brains...if we'd only use our own first before relying on those of news folks who are there to sell us rather than inform us.

Post was last edited on April 11, 2019 1:38 PM PDT

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Try this link
Apr 11, 2019 1:44PM PDT
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I already saw that. I took out your dupe
Apr 11, 2019 2:55PM PDT

and read the title. It's a propaganda piece by an outlet well known for doling out strongly opinionated material. I don't feast on that stuff. There is so much more that goes into the whole taxation plan changes the picture dramatically. One this is that, for the most part, lower wage people's income is primarily from salary or hourly wage. Those in the upper brackets may have multiple sources. They'll still have a salary which is taxed like that of anyone else. They'll also have income from investments which is taxed differently. The lower tax on that income allows for businesses to build. These folks never see the money except on paper. It goes back into building the businesses that create the jobs most other people have. Go ahead and take that away and see who gets hurt most. What these "anti wealthy" sites are doing is including the income that's not part of a person's wages. That skews the numbers. Again...it's not money these folks use to spend on champaign and caviar at wild parties. It's in the pockets of folks who still have and want jobs. I've said enough...I've said too much. Over and out .

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If that 'fake news site'
Apr 11, 2019 4:04PM PDT

Does not agree with your opinion search around until you find a site that says the tax cut bill did NOT favor the wealthy.

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OK...see the below read
Apr 12, 2019 2:00AM PDT
https://www.investors.com/politics/editorials/gop-tax-cuts-middle-class/

Trash it if you like as it's from a site that caters to investors (you know....those greedy Wall Street shoppers...) I'm not going to sit here and claim this to be an end all to other arguments, however but I will say that the picture is much larger than that presented by the complainers with an agenda.
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I haven't read either link; my dog's not in this fight.
Apr 12, 2019 6:15AM PDT

But, if you're saying Bloomberg the company is skewed in one political direction or another, that's news to me. My impression has been that it's like The Economist, Reuters and newscientist. All have such blinkered views of their fields (money, free trade, business, science) that they're immune. They're not perfect and in fact often disagree with my stances, but I go to them because they have no other agendas, hidden or otherwise.
Guess I was fooled. Happy

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I don't dispute that the middle class
Apr 12, 2019 7:24AM PDT

Got a tax cut.

My point is who got the biggest chunk of the Ryan give away program.

To sell it as a middle class tax cut and then give the bulk to the wealthy seems a bit misleading.

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Steven, I'll stick this in here.
Apr 17, 2019 3:16PM PDT

I think it belings with your well-considered comments on charitable giving.

https://www.reuters.com/article/us-france-notredame-donations/as-notre-dame-money-rolls-in-some-eyebrows-raised-over-rush-of-funds-idUSKCN1RT28Q?il=0

This real world example seems much more complicated than your hypotheticals.
Note the references to Grenfell and the padre's homeless charity. (My only prejudice about the cathedral is the one mentioned early on: No people hurt, and it's a building, that doesn't house homeless or low income people.) Aside from the deaths, some Grenfell victims are still homeless and/or incapacitated. They could use a franc or euro, or maybe a Gucci bag to pawn.

I found myself on the side of the 'money shamed' rich folks. I think Reuters got it right on the motives (plural).

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Good comparison Doug.
Apr 17, 2019 3:23PM PDT

I mean Notre Dame versus Grenfell. As you said, ND none hurt, Grenfell, still suffering. Grenfell was a real disaster with the UK Gov ignoring much suffering.
Dafydd.

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That made me sad (Grenfell)
Apr 17, 2019 4:11PM PDT
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Grenfell.
Apr 17, 2019 4:43PM PDT

Agreed Bob. Not to mention the smaller people who gave a couple of pounds/ euros.
Dafydd.