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Message
2023 Tax Filing
Posted on 2/6/24 at 10:45 am
Posted on 2/6/24 at 10:45 am
Anyone else seeing a shift in your prep filing of 2023 taxes?
I'm noticing preliminarily that I owe considerably for 2023 whereas 2022 returned a refund to me. No shift in income.
Even with the income thresholds for the 2023 tax brackets adjusted significantly (up about 7% — from 2022 due to record-high inflation) it's rather astonishing the YoY swing.
I'm noticing preliminarily that I owe considerably for 2023 whereas 2022 returned a refund to me. No shift in income.
Even with the income thresholds for the 2023 tax brackets adjusted significantly (up about 7% — from 2022 due to record-high inflation) it's rather astonishing the YoY swing.
7
Posted on 2/6/24 at 10:48 am to Nu Iota Prophet
Yes. We typically get back a significant refund, this year we owe about the same amount as the usual refund...
This post was edited on 2/6/24 at 10:48 am
Posted on 2/6/24 at 11:05 am to Nu Iota Prophet
paid more this year for same income
Posted on 2/6/24 at 11:16 am to Nu Iota Prophet
I’m conservative on my withholdings (giving extra to Uncle Sam), and yet I’m paying them this year. I’m ticked.
Also I got screwed on HSA contribution limits (apparently a family limit applies to everyone in the family, even if you’re on separate plans) and now I have to figure out how to report a withdrawal from my HSA for income taxing.
Also I got screwed on HSA contribution limits (apparently a family limit applies to everyone in the family, even if you’re on separate plans) and now I have to figure out how to report a withdrawal from my HSA for income taxing.
Posted on 2/6/24 at 11:45 am to Nu Iota Prophet
Makes no sense to evaluate your taxes by simply looking at return vs owing. What was your taxable income, what was the resultant taxes owed, did you have same credits or not..crunch the numbers and find effective tax rate. Only number that matters.
Posted on 2/6/24 at 11:58 am to Dawgfanman
quote:
Makes no sense to evaluate your taxes by simply looking at return vs owing.
This.
Not all income is created equal either.
Bottom line is if you had $100,000 of taxable W2 income in 2022 and 2023, your tax will be lower in 2023. How much you withheld in 2022 vs 2023 impacts refund/owe, but doesn’t impact tax liability (other than underpayment penalty which I’m ignoring for this exercise).
This is why I wish we could just pay everything when we filed rather than have stuff withheld during the year. I have clients that make $500k and get a refund and some that make $60k and owe taxes. It’s irrelevant. The tax liability (line 16 and 24) is what matters.
Posted on 2/6/24 at 11:59 am to tigersmanager
quote:
paid more this year for same income
Not possible if it’s actually the same type of income and your credits are unchanged.
Posted on 2/6/24 at 12:47 pm to Nu Iota Prophet
Check your credits and check your withholding
Posted on 2/6/24 at 1:57 pm to slackster
You are indeed correct. All things being equal, in your scenario, taxes should be lower. The 7% I speak of in my OP should result favorably on 2023 taxes.
Something else is going on regarding my matter. I'll have to dig deeper.
Something else is going on regarding my matter. I'll have to dig deeper.
This post was edited on 2/6/24 at 9:29 pm
Posted on 2/6/24 at 7:38 pm to slackster
quote:
This is why I wish we could just pay everything when we filed rather than have stuff withheld during the year
This has contributed to the downfall of our nation.. Not to get political, but if people actually realized how much tax they were paying, they would be up in arms.
Posted on 2/7/24 at 8:34 am to b-rab2
quote:
This has contributed to the downfall of our nation.. Not to get political, but if people actually realized how much tax they were paying, they would be up in arms.
Abosolutely this. I'm self employeed so have to pay quarterly. The is quite frankly, my biggest bill I have and it's every damn quarter.
There would be a revolution if everyone paid quarterly. It's laughable when I hear W2 only folks discuss taxes and how mad they are when they owe like 800 bucks.
This post was edited on 2/7/24 at 11:36 pm
Posted on 2/7/24 at 9:39 am to tigersmanager
Impossible. Check your taxable income, then check your tax credits and withholdings. What changed? There's your answer.
We process north of 800 tax returns each year and you would be amazed how many people change their withholdings and don't remember. Also, with inflation, many clients need the extra cash in their budget, so they are sticking it to themselves at tax filing time.
Numbers don't lie. The 1040 is very easy to read, especially if all you have is a W2. 1099's and potential SE tax can be different.
We process north of 800 tax returns each year and you would be amazed how many people change their withholdings and don't remember. Also, with inflation, many clients need the extra cash in their budget, so they are sticking it to themselves at tax filing time.
Numbers don't lie. The 1040 is very easy to read, especially if all you have is a W2. 1099's and potential SE tax can be different.
Posted on 2/7/24 at 10:18 am to Dawgfanman
quote:
Makes no sense to evaluate your taxes by simply looking at return vs owing. What was your taxable income, what was the resultant taxes owed, did you have same credits or not..crunch the numbers and find effective tax rate. Only number that matters.
Yeah tax season is always...illuminating, isn't it? Even on the money board some people just don't get it.
Posted on 2/7/24 at 11:29 am to Nu Iota Prophet
Figured it out. New company (started in 2023) software did not seem to capture W4 inputs properly and therefore Fed. Withdrawals were half of what there were in the past.
Note to self to check these things annually.
Thanks @slackster. You pushed me to think differently about this. Appreciate it.
Note to self to check these things annually.
Thanks @slackster. You pushed me to think differently about this. Appreciate it.
This post was edited on 2/7/24 at 11:38 am
Posted on 2/7/24 at 1:17 pm to Nu Iota Prophet
quote:
New company (started in 2023) software did not seem to capture W4 inputs properly and therefore Fed. Withdrawals were half of what there were in the past.
This is almost always the case in these situations. You start a new job (or company gets bought out, or new payroll system, etc) and fill out a new W-4, and something gets screwy.
And, if you change jobs, most people also change salary, so you expect a change in your withholding... and don't think about whether the change is simply because of change of salary, or also because the W-4 has a problem.
But if your withholding went down by half, unless your income went way down... that should have been a clear sign something was wrong.
Now you know.
Posted on 2/7/24 at 1:45 pm to LSUFanHouston
I guess I’m a crazy person, but each year in January I project my liability for the next year and check my withholding to make sure it’s gonna be close. I then adjust my withholding if needed. My goal is as close to 0 owing/return at tax time as possible.
Posted on 2/7/24 at 1:58 pm to tigersmanager
quote:
paid more this year for same income
The upper limit of each tax bracket went up about 7%, so that's impossible.
In my experience so far this year, the withholding tables that the IRS put out for 2023 have pushed a lot of people into owing this year. My wife's withholdings went down to zero at the beginning of the year due to the new tables. As a CPA, I knew better and changed it back but many people didn't even notice.
Also, the new W4s confuse a lot of people.
This post was edited on 2/7/24 at 1:59 pm
Posted on 2/7/24 at 2:07 pm to Nu Iota Prophet
No one understands tax because the tax code is retarded and our media.
You have people who actually believe businesses and the wealthy pay zero taxes and only the poor pay taxes.
You have people who actually believe businesses and the wealthy pay zero taxes and only the poor pay taxes.
Posted on 2/7/24 at 3:02 pm to Billy Blanks
quote:
Abosolutely this. I'm self employeed so have to pay quarterly. The is quite frankly, my biggest bill I have and it's evrey damn quarter.
There would be a revolution if everyone paid quarterly. It's laughable when I hear W2 only folks discuss taxes and how mad they are when they owe like 800 bucks.
It's easily the hardest check I write. I generally underpay/over save, so if there is extras on April 15, it's in my savings account and not the government's. The downside to that strategy is that the IRS isn't always in a hurry to cash my checks (for some reason), so sometimes I'll hang around with an extra $10,000 in my checking account for most of April.
Posted on 2/7/24 at 3:59 pm to LSUGUMBO
quote:
The downside to that strategy is that the IRS isn't always in a hurry to cash my checks (for some reason), so sometimes I'll hang around with an extra $10,000 in my checking account for most of April.
Consider using the eftps website. Much easier. You can schedule quarterly well in advance as well if needed.
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