2018 IRS Tax Withholding Calculator
 

GCMs

The IRS put out their new withholding calculator several weeks ago, and with the major overhaul in the 2018 tax code it's worth checking to see if your withholding needs to be adjusted. When DH and I did ours, it turned out that we were under withheld by about 25% - despite getting a small refund in past years.

You'll need your most recent pay stub from each job, plus a copy of your 2017 return.

This is especially something you may wish to do if you live in a state with significant state and local income taxes, as those are no longer fully deductible, and in some cases this change will effectively "cancel out" charitable giving.

Re: 2018 IRS Tax Withholding Calculator
 

Thanks for posting this. We had HR Block run our numbers. It's good to plan ahead.

Re: 2018 IRS Tax Withholding Calculator
 

Because it's completely reasonable to tax us on income we don't even get. :rolleyes

I shouldn't be surprised. We get taxed on money we spend on sales tax and other random taxes.

Re: 2018 IRS Tax Withholding Calculator
 

Deductions for kids changed. It's really worth running the numbers to see.

Re: 2018 IRS Tax Withholding Calculator
 

The motivation was 100% political, to shift more of the federal tax burden to "blue" states, which was why the remaining blue state Republicans were so furious about it. It may come back to bite the GOP, as losing those seats this fall could cost them the House majority.

---------- Post added at 11:06 AM ---------- Previous post was at 11:02 AM ----------

Kids were a big change, as were itemized deductions.

My fear is that churches and other charities will take a hard hit in 2019 when those who have not run the numbers now realize they may not be getting the refund they expected next spring.

Re: 2018 IRS Tax Withholding Calculator
 

How much charitable giving to people do who are getting refunds? :think Do you really think that's going to affect charities?

Re: 2018 IRS Tax Withholding Calculator
 

Thank you. We are still exempt but I wondered. Standard deduction will now be better for us, which I’m actually glad about because our home mortgage interest is just going down, though payments are staying the same but less is interest now.

We don’t do charitable giving for the tax break, so it won’t affect our giving.

Re: 2018 IRS Tax Withholding Calculator
 

In blue states, yes. Through this year, property taxes, state/local taxes, charitable giving were pretty much all fully deductible. The standard deduction was $12,000.

The TOTAL deduction for state/local and property taxes combined is now limited to $10,000. In the state where I live, property taxes for middle class people tend to be anywhere from $2,500 to 7,000 . State/local taxes tend to be 10% of gross income. So, a family in a modest house earning $80,000 gross in my blue state will lose are least $3000 in deductions, and probably much more.

The standard deduction has been upped to $24,000, but people are mostly pushed put of the lowest brackets. Therefore, unless someone has large mortgage interest payments, most of the first $14,000 of giving now receives essentially no tax benefit.

So, people who tithe or otherwise give substantial charity may find they owe thousands more than in 2017.

An additional problem is that there has been political advertising calling this "Your tax cut," but the calculations just don't bear that out (except for the wealthy ). I fear that people will do their taxes early next year and find they both won't be getting a refund, may even owe tax, and that will be disastrous for both household budgets and charity.

Re: 2018 IRS Tax Withholding Calculator
 

That happened to us for the 2014 tax year. It was horrendous.

Re: 2018 IRS Tax Withholding Calculator
 

Just to clarify, this is what I was responding to above.

Re: 2018 IRS Tax Withholding Calculator
 

I called my pops who has done taxes for 17 years. 60+hours a week (crazy!). He said less than 10% of his clients give to charity and nearly all are Christians who are tithing. A few give to animal charities. Very interesting.

He agreed it will be a nightmare for blue states with high property taxes.

Re: 2018 IRS Tax Withholding Calculator
 

:phew I think we're ok.