[Flying Ace]

Originally Posted by jmg

Just finished my corporate and personal taxes. I ended up owing much much much less even with our write-offs and business expenses remaining pretty much the same. I took a few months off, so while I took in more income while I was working, it balanced out with those two months off. I usually end up owing $15k corporate for Q4, but this time I was over. I guess that's a good thing right? I had a talk with my business manager about our tax schedule, but given there was a lot of new tax laws, I think it was acceptable that I overpaid the first few quarters (we kept the 2017 schedule to be safe). But I'd prefer not to do that again.

it's sub-optimal to overpay quarterly taxes if you have cash flow issues. Hopefully you didn't have to finance it.

How's your business structured?

[jmg]

Originally Posted by Flying Ace

it's sub-optimal to overpay quarterly taxes if you have cash flow issues. Hopefully you didn't have to finance it.

How's your business structured?

No I don't have cash flow issues and my overhead is very low. It's a C Corp.

[Flying Ace]

Originally Posted by jmg

No I don't have cash flow issues and my overhead is very low. It's a C Corp.

oof C Corp, the least tax efficient setup! So did both the business and your personal tax get reduced?

[jmg]

Originally Posted by Flying Ace

oof C Corp, the least tax efficient setup! So did both the business and your personal tax get reduced?

Yup both!

[Flying Ace]

My AGI shot up 66% this year due to stock sales.

My fed effective tax rate is 20% (16% last year). No tax break for me. I also owe an additional $66k in taxes this year. Time to sell M6 I suppose.

[RickFLM4]

I copied / combined portions of some posts I made in politics section:

Gross income +11.5% in 2018 vs. 2017
Taxable income +19%
ETR (tax / taxable income) almost 3 percentage points lower (from low 20s to high teens, not including 10+% self employment tax each year)
Tax / AGI 6+ percentage points lower

As a result of favorable tax rates, I decided to pay tax on money set aside this year rather than deposit it into my SEP-IRA, which would have deferred taxes until funds are withdrawn. We received a major benefit from QBI / Section 199A. SEP-IRA is deducted above AGI with QBI is below so tax as a % of AGI is very skewed.

We did not see a major adverse impact due to changing from itemized deduction + personal exemptions in 2017 to standard deduction in 2018. Any impact of foregoing tax deferred savings and change to standard deduction was more than offset by lower tax rates and 199A / QBR. Considering I didn’t defer tax on retirement savings and gross earnings increased, I’d say Tax reform worked very well for us.

[Flying Ace]

So it looks like I'm the only guy here that got a worst tax rate this year?

[RickFLM4]

Originally Posted by Flying Ace

So it looks like I'm the only guy here that got a worst tax rate this year?

Some others here, although some seem to be missing how to assess (looking at refunds instead of tax rate):

https://www.bimmerpost.com/forums/sh....php?t=1595448

[Hawkeye]

Just finished taxes, 13.3% effective rate based on gross income. I think that is in line or a tad lower than last year, although so much changed it is hard to do apples to apples.

[Alfisti]

Americans complaining about taxes, that'll do me.

[TheWatchGuy]

went from 18% fed + state last year to 15.9% fed + state this year. not too shabby

[Pheonix]

We lost a quite a bit of Deductions (being the taxes state of California). However, our Effective Rate went from 29% to about 25% so yes we paid less under the new tax laws.

[Hawkeye]

Originally Posted by Alfisti

Americans complaining about taxes, that'll do me.

This is just income tax though. We still have additional taxes on everything we own or spend money on as well. It is still less than most of the more socialized countries obviously, but there is more than just the numbers we are quoting.

[Alfisti]

it's the same here and the numbers to start are near double. My household pays about 50% in taxes.

That's an estimate for everything from income tax, property tax, gas tax, sales tax blah blah blah.

[Flying Ace]

I was able to still claim itemized deductions this year - around 31k.

[RickFLM4]

Originally Posted by Alfisti

it's the same here and the numbers to start are near double. My household pays about 50% in taxes.

That's an estimate for everything from income tax, property tax, gas tax, sales tax blah blah blah.

As noted above, most rates posted in this thread are just federal income taxes. Social security and Medicare are up to an additional 15%, subject to caps on social security but not Medicare. Employers pay 1/2 and employees pay 1/2 but those of us who are self employed pay both employer and employee portions. We also have property taxes, sales taxes, gas tax etc. Some states also have state income taxes, intangible / investment taxes and all sorts of creative taxes.

On an "all in" basis, I think there are plenty of people paying 40%+. Of course we also pay for health insurance. If not obtaining through an employer that can easily cost 5% - 10% (or more) of gross earnings. I still think we do well compared to a lot of countries, particularly after tax reform, but it isn't as much of a difference as implied by comparing a 50% "all in" rate to the federal income tax rates in this thread.

[Z K]

Originally Posted by Flying Ace

bump, anyone finish their 2018 taxes yet and have a comparison of your effective tax rates in 2017 and 2018?

Did Trump end up giving you a tax cut?

I think most people who have a state tax and claim SALT and mortgage interest/property tax deductions will end up paying more over last year.

I ended up writing a check to the fed when I usually get a refund. No other changes year to year.

"Tax cuts" were complete BS for me - more like tax increase.

[jmg]

Originally Posted by Z K

I think most people who have a state tax and claim SALT and mortgage interest/property tax deductions will end up paying more over last year.

I ended up writing a check to the fed when I usually get a refund. No other changes year to year.

"Tax cuts" were complete BS for me - more like tax increase.

My corporate effective rate was very low compared to 2017 and not only softened the blow it made all the changes to SALT and property taxes moot. I ended up paying much less in taxes for 2018 despite the same gross.

[TheWatchGuy]

Originally Posted by Z K

I think most people who have a state tax and claim SALT and mortgage interest/property tax deductions will end up paying more over last year.

I ended up writing a check to the fed when I usually get a refund. No other changes year to year.

"Tax cuts" were complete BS for me - more like tax increase.

but what was your effective tax rate?

i had to pay this year when i got a refund last year, but my overall tax rate went down 2%. I also have state income tax, property taxes, mortgage interest, etc.

and there in lies the problem with the simple man. they dont understand and just see that they have to pay at the end of the year, and dont realize they paid less overall

[jmg]

Originally Posted by Jinesh

1. It was literally suggested by someone a few posts back.

2. At some point making less of each extra dollar isn't worth it. Would it be worth it to make that extra dollar if you were taxed 99% on it? Of course not. Everyone has a point where making a smaller % of each incremental dollar isn't worth it.

Making more and keeping less of the incremental amount still leaves you with more, but the effort to make the incremental portion you keep isn't always worth it.

Depends. Was it overtime pay? Weekend or night differential? The increased rate will make it worth it.

Also, if you are planning to take some time off, that extra pay will not increase your taxable income as much as you think.

[Murf993]

Originally Posted by Alfisti

Americans complaining about taxes, that'll do me.

I'd laugh if I wasn't paying so much tax.

[RickFLM4]

Originally Posted by jmg

Depends. Was it overtime pay? Weekend or night differential? The increased rate will make it worth it.

Also, if you are planning to take some time off, that extra pay will not increase your taxable income as much as you think.

Is Jinesh a person or a spambot?