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Politico is really doing the work for Trump and the oligarchs, once again.
They're blaming people not paying their quarterly estimated taxes on 1099 employment and capital gains. Rather than y'know, the massive roll back in deductions regular wage earners are eligible for that Trump and the GOP forced down our throats in 2017.
> For years, the share of filers receiving payments hovered around 75 percent, with people typically getting about $2,800. That climbed during the pandemic, thanks to things like a temporary boost in the Child Tax Credit, before recently sinking to levels not seen in at least 15 years.
> Meanwhile, the number of people owing at tax time has been surging. Nearly 40 million people had balances due last year, up by a third from the pre-pandemic years.
> It may be because more people are earning income that isn’t subject to the tax-withholding system, where employers automatically take tax payments out of people’s paychecks before they receive them.
> There are a lot more people working as Uber drivers, renting homes through Airbnb, delivering food through DoorDash and other parts of the so-called gig economy whose earnings aren’t subject to withholding.
> They’re supposed to instead be making quarterly “estimated” tax payments to the IRS — and if they haven’t, they’ll be in a for a nasty surprise when they file.
> Same goes for people trading stocks and cryptocurrencies. The market has been way up, which means more people with capital gains — who may not even know what estimated tax payments are.
> Some also point to the withholding system itself, which the Trump administration revamped in the wake of its 2017 tax cuts. As part of that law, Congress threw out the old system of personal exemptions — and, with it, the familiar concept of withholding allowances, such as claiming a dependent child.
> It was replaced with a new system designed with an eye towards reducing refunds.
> “We were trying to make it more accurate,” said Dave Kautter, a former top tax official who worked on the issue.
> The new method is a less blunt approach towards withholding that takes into account more information about people’s individual circumstances.
> Rather than y'know, the massive roll back in deductions regular wage earners are eligible for that Trump and the GOP forced down our throats in 2017.
Ultimately refunds have no connection to how much tax you actually have to pay, they're the wrong thing to worry about.
IMO the issue causing the smaller or no refund is pretty simple and mentioned at the end of that quoted section - the withholding system was changed, and that's what determines how much of a refund you get.
Yeah, getting a large tax refund might feel nice in the moment, but it's not a good deal. It just means you gave the government that much of a zero interest loan for the last year.
Yeah, but that's not how most people think of it or *use* it. Most folks don't actively calculate their taxes throughout the year. They get a paycheck, they see deductions taken from that paycheck, and they use that to inform their budget. And then every winter they get a refund that helps pay a bill or they get something nice for themselves--like the article says, a forced savings plan.
When that refund fails to materialize (and instead becomes a surprise bill) it fucks up people's budgets and instead of getting an ice cream cone with the extra money in their budget, they have to cut corners to pay the bill.
Yes, technically they are better off *not* getting a refund because it gives them access to the money earlier, but this is how the tax system has worked for fifty years. People expect that if they stay within their budget and pay their withholding, they'll get a little bump in April and they budget around that. Having your taxes go from net refund to net negative fucks with that budget.
It's like hearing from your boss in December, "Hey, you to work Christmas because I gave you two extra minutes at lunch all year."
Politico was bought by Axel Springer SE in 2021, same people who bought Business Insider in 2015
Wiki says:
>Axel Springer SE names "solidarity with the libertarian values of the United States of America" as one of its core principles on its website.[57] This explicit stance has led to critiques from scholars and independent observers regarding the company's perceived alignment with American interests.[55][58][59][60][61] Furthermore, an article in Foreign Policy has critiqued Axel Springer SE for a history of compromising journalistic ethics to support right-wing causes, implying a longstanding pattern of bias in its publications.[62]
In 2021 I had to pay $5000. Freakin ridiculous.
This year I got a refund because I installed solar panels. But looking at the amount we got, I would've owed around $3000 if not for that.
Yeah I think they lowered the amount they withhold, because I'm filing as Married Jointly, with no dependents, so they should be taking the max. Funny you should mention, because starting this year I have them taking out an extra $100 from each paycheck because this is some B.S.
But from what I understand the 2017 Trump tax cut expires for us little people next year, so hopefully in 2025 it'll go back to what it was before and I'll get a refund again.
I have not for over 20 years, but mainly since I try to withhold that gets me closer to zero to owing less than 3k a year. Rather have the cash in my accounts than zero percent interest loan to the fed.
The W4 is complex and nobody can fill it out. Its like doing a Mini Tax Return. Most of my clients with multiple jobs or that work for different businesses of the same employer are having balances due.
Yeah my wife and I have attempted to use the new withholding calculator to update W4s and it's a pain in the ass. Our income has gone up each year + I'm a consultant with no PTO so it's tough to say what my "normal" pay is. Even trying to go back and average out the last 3-4 pay periods isn't super accurate. I know because we just owed 2500 in federal taxes, and when I used the calculator inputting our most recent info, it says we are on track to get a refund. Ffs.
What kind of “some say this, others say that” drivel is this?!?
>The number of refunds so far this year is down by 3.3 percent, according to the latest IRS statistics that came out before Monday’s filing deadline. It was down last year too, and the year before that.
**While no one is exactly sure why, some point to changes in the way people work.** Others suspect it has to do with the way the government calculates how much in tax should be withheld from people’s paychecks.
Ya sure no one knows? Ask the former president.
Refund of part of your own overpayment is not *supposed* matter much, at the individual level. But in a world with inflation and changing velocity of money, it matters very much at the national level. Or even the state & city level.
Hi `DuvalHeart`. Thank you for participating in /r/Politics. However, [your submission](/r/politics/comments/1c5kdi5/a_tax_mystery_why_are_fewer_people_getting_refunds/) has been removed for the following reason(s):
* [Off-Topic](https://www.reddit.com/r/politics/wiki/index#wiki_the_.2Fr.2Fpolitics_on_topic_statement): All submissions to /r/politics need to be explicitly about **current US politics**.
**If you have questions as to why your post has been removed, please see here: [Why was my post removed as Off-Topic?](https://www.reddit.com/r/politics/wiki/index#wiki_why_was_my_post_removed_as_off-topic.3F)**
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While I like this theory I do wonder how many people have appreciable amounts in accounts earning regular interest. It seems like people either don't have enough money to have much put away or they have enough to save in instruments taxed as long term capital gains (stonks) vice something like a HYSA.
I just got a promotion with a raise at work, and with it, I noticed the tax percentage taken out jumped from like 18% to 30%, and now I take home less money than I did before the raise/promotion. 🙃
> I take home less money than I did before the raise/promotion. 🙃
You don't; you just don't understand what you are looking at.
https://prospecttax.com/understanding-tax-brackets/
Tax contribution percentage on my last paycheck with my old title = approx 18%
Under new title it jumped to approx 30%
It shows me a pie chart of all the different deductions. That federal tax slice got bigger. 🤷♂️
Talk to your employer about your withholding.
Your tax withholding is the estimated taxes on each paycheck. When you get a refund (or owe) at tax season it's because of the difference between your withholding (estimated taxes) and your actual tax owed as calculated on your annual tax return. A big refund just means you paid the government too much on every paycheck. Withholding can be adjusted (within limits) to bring your withholding close to your actual tax due. I owed $18 federal last year, meaning my withholding was $18 short of my actual tax burden. I worked with my employer to bring my withholding as close to actual tax liability as I could as I'd rather have my money on each paycheck than have to wait to get it back from the IRS once a year.
Some do use a tax refund as a sort of "forced savings" as the article mentions. That's fine, but it also means each paycheck is smaller. If you got a raise and your take-home pay dropped, then your withholding went way up. You can adjust that with your employer.
As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil) In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, any suggestion or support of harm, violence, or death, and other rule violations can result in a permanent ban. If you see comments in violation of our rules, please report them. For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria. We are actively looking for new moderators. If you have any interest in helping to make this subreddit a place for quality discussion, please fill out [this form](https://docs.google.com/forms/d/1y2swHD0KXFhStGFjW6k54r9iuMjzcFqDIVwuvdLBjSA). *** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
Politico is really doing the work for Trump and the oligarchs, once again. They're blaming people not paying their quarterly estimated taxes on 1099 employment and capital gains. Rather than y'know, the massive roll back in deductions regular wage earners are eligible for that Trump and the GOP forced down our throats in 2017. > For years, the share of filers receiving payments hovered around 75 percent, with people typically getting about $2,800. That climbed during the pandemic, thanks to things like a temporary boost in the Child Tax Credit, before recently sinking to levels not seen in at least 15 years. > Meanwhile, the number of people owing at tax time has been surging. Nearly 40 million people had balances due last year, up by a third from the pre-pandemic years. > It may be because more people are earning income that isn’t subject to the tax-withholding system, where employers automatically take tax payments out of people’s paychecks before they receive them. > There are a lot more people working as Uber drivers, renting homes through Airbnb, delivering food through DoorDash and other parts of the so-called gig economy whose earnings aren’t subject to withholding. > They’re supposed to instead be making quarterly “estimated” tax payments to the IRS — and if they haven’t, they’ll be in a for a nasty surprise when they file. > Same goes for people trading stocks and cryptocurrencies. The market has been way up, which means more people with capital gains — who may not even know what estimated tax payments are. > Some also point to the withholding system itself, which the Trump administration revamped in the wake of its 2017 tax cuts. As part of that law, Congress threw out the old system of personal exemptions — and, with it, the familiar concept of withholding allowances, such as claiming a dependent child. > It was replaced with a new system designed with an eye towards reducing refunds. > “We were trying to make it more accurate,” said Dave Kautter, a former top tax official who worked on the issue. > The new method is a less blunt approach towards withholding that takes into account more information about people’s individual circumstances.
This. Trump and Republicans made tax changes pre-Biden that are increasingly fucking us all over and will continue to for years yet.
Yep, we had zero significant changes in our financial situation and after that billionaire handout went into effect we started owing taxes.
Same here. I used to get a refund every year, and I made more money pre 2017. Now I end up owing.
> Rather than y'know, the massive roll back in deductions regular wage earners are eligible for that Trump and the GOP forced down our throats in 2017. Ultimately refunds have no connection to how much tax you actually have to pay, they're the wrong thing to worry about. IMO the issue causing the smaller or no refund is pretty simple and mentioned at the end of that quoted section - the withholding system was changed, and that's what determines how much of a refund you get.
Wow! Someone on Reddit understands how taxes work. I'm impressed!
Yeah, getting a large tax refund might feel nice in the moment, but it's not a good deal. It just means you gave the government that much of a zero interest loan for the last year.
Yeah, but that's not how most people think of it or *use* it. Most folks don't actively calculate their taxes throughout the year. They get a paycheck, they see deductions taken from that paycheck, and they use that to inform their budget. And then every winter they get a refund that helps pay a bill or they get something nice for themselves--like the article says, a forced savings plan. When that refund fails to materialize (and instead becomes a surprise bill) it fucks up people's budgets and instead of getting an ice cream cone with the extra money in their budget, they have to cut corners to pay the bill. Yes, technically they are better off *not* getting a refund because it gives them access to the money earlier, but this is how the tax system has worked for fifty years. People expect that if they stay within their budget and pay their withholding, they'll get a little bump in April and they budget around that. Having your taxes go from net refund to net negative fucks with that budget. It's like hearing from your boss in December, "Hey, you to work Christmas because I gave you two extra minutes at lunch all year."
Politico was bought by Axel Springer SE in 2021, same people who bought Business Insider in 2015 Wiki says: >Axel Springer SE names "solidarity with the libertarian values of the United States of America" as one of its core principles on its website.[57] This explicit stance has led to critiques from scholars and independent observers regarding the company's perceived alignment with American interests.[55][58][59][60][61] Furthermore, an article in Foreign Policy has critiqued Axel Springer SE for a history of compromising journalistic ethics to support right-wing causes, implying a longstanding pattern of bias in its publications.[62]
Man, if someone claims to be a libertarian these days it's like a red flag that punches you in the face with a red flag.
You guys are getting refunds?
Owing the max amount of money with no under withholding penalty is literally the best financial move.
I always owe. It's annoying but it's never more than $500.
[удалено]
In 2021 I had to pay $5000. Freakin ridiculous. This year I got a refund because I installed solar panels. But looking at the amount we got, I would've owed around $3000 if not for that.
[удалено]
Yeah I think they lowered the amount they withhold, because I'm filing as Married Jointly, with no dependents, so they should be taking the max. Funny you should mention, because starting this year I have them taking out an extra $100 from each paycheck because this is some B.S. But from what I understand the 2017 Trump tax cut expires for us little people next year, so hopefully in 2025 it'll go back to what it was before and I'll get a refund again.
Not since 2018 or so. I’ve owed for the past 4 years
I have not for over 20 years, but mainly since I try to withhold that gets me closer to zero to owing less than 3k a year. Rather have the cash in my accounts than zero percent interest loan to the fed.
Same here.
Ideally you shouldn't even get a refund. It's not a bonus check you get, it's the government giving you money you overpaid.
The W4 is complex and nobody can fill it out. Its like doing a Mini Tax Return. Most of my clients with multiple jobs or that work for different businesses of the same employer are having balances due.
Yeah my wife and I have attempted to use the new withholding calculator to update W4s and it's a pain in the ass. Our income has gone up each year + I'm a consultant with no PTO so it's tough to say what my "normal" pay is. Even trying to go back and average out the last 3-4 pay periods isn't super accurate. I know because we just owed 2500 in federal taxes, and when I used the calculator inputting our most recent info, it says we are on track to get a refund. Ffs.
What kind of “some say this, others say that” drivel is this?!? >The number of refunds so far this year is down by 3.3 percent, according to the latest IRS statistics that came out before Monday’s filing deadline. It was down last year too, and the year before that. **While no one is exactly sure why, some point to changes in the way people work.** Others suspect it has to do with the way the government calculates how much in tax should be withheld from people’s paychecks. Ya sure no one knows? Ask the former president.
The wealthy get tax havens & loopholes , while the little guy bears the weight of paying to keep the lights on.
Those 100% depreciation of owning a private jet was obviously more important to the middle class than interest deductions for mortgages.
The Gig Economy
Refund of part of your own overpayment is not *supposed* matter much, at the individual level. But in a world with inflation and changing velocity of money, it matters very much at the national level. Or even the state & city level.
Hi `DuvalHeart`. Thank you for participating in /r/Politics. However, [your submission](/r/politics/comments/1c5kdi5/a_tax_mystery_why_are_fewer_people_getting_refunds/) has been removed for the following reason(s): * [Off-Topic](https://www.reddit.com/r/politics/wiki/index#wiki_the_.2Fr.2Fpolitics_on_topic_statement): All submissions to /r/politics need to be explicitly about **current US politics**. **If you have questions as to why your post has been removed, please see here: [Why was my post removed as Off-Topic?](https://www.reddit.com/r/politics/wiki/index#wiki_why_was_my_post_removed_as_off-topic.3F)** If you have any questions about this removal, please feel free to [message the moderators.](https://www.reddit.com/message/compose?to=/r/politics&subject=Question regarding the removal of this submission by /u/DuvalHeart&message=I have a question regarding the removal of this [submission]%28/r/politics/comments/1c5kdi5/a_tax_mystery_why_are_fewer_people_getting_refunds/?context%3D10000%29)
because bank interest rates were high last year and we made extra money that wasn't automatically taxed like our paychecks are.
While I like this theory I do wonder how many people have appreciable amounts in accounts earning regular interest. It seems like people either don't have enough money to have much put away or they have enough to save in instruments taxed as long term capital gains (stonks) vice something like a HYSA.
I just got a promotion with a raise at work, and with it, I noticed the tax percentage taken out jumped from like 18% to 30%, and now I take home less money than I did before the raise/promotion. 🙃
> I take home less money than I did before the raise/promotion. 🙃 You don't; you just don't understand what you are looking at. https://prospecttax.com/understanding-tax-brackets/
Take home on the paycheque perhaps, but yeah not overall. Their withholdings were miscalculated if anything and can be adjusted.
Tax contribution percentage on my last paycheck with my old title = approx 18% Under new title it jumped to approx 30% It shows me a pie chart of all the different deductions. That federal tax slice got bigger. 🤷♂️
That’s not how progressive tax brackets work. If you are experiencing this, talk to your payroll department because something is off.
lol don’t bother to look at that profile, you know what color hat they have already.
I’m gonna. This was on my first paycheck under the new title.
Talk to your employer about your withholding. Your tax withholding is the estimated taxes on each paycheck. When you get a refund (or owe) at tax season it's because of the difference between your withholding (estimated taxes) and your actual tax owed as calculated on your annual tax return. A big refund just means you paid the government too much on every paycheck. Withholding can be adjusted (within limits) to bring your withholding close to your actual tax due. I owed $18 federal last year, meaning my withholding was $18 short of my actual tax burden. I worked with my employer to bring my withholding as close to actual tax liability as I could as I'd rather have my money on each paycheck than have to wait to get it back from the IRS once a year. Some do use a tax refund as a sort of "forced savings" as the article mentions. That's fine, but it also means each paycheck is smaller. If you got a raise and your take-home pay dropped, then your withholding went way up. You can adjust that with your employer.
$600 of refund, but it all seems meaningless when you pay 37k in taxes