I haven't given it much thought during the past year, but I wonder if anyone has done a deep-dive analysis of exactly how many Americans adjusted their 2018 income tax withholding to account for any reduced tax burden they may enjoy under the 2017 tax cuts?While corporations (and the wealthiest taxpayers) have clearly accounted for their own tax savings under the tax bill, I suspect that significant numbers of blue-collar workers and middle class salaried individuals may have intentionally or perhaps forgotten to change their withholding elections during 2018.Despite the increase in interest rates and the seriously destabilizing political posturing in Washington, DC, is it possible that ordinary taxpayers may experience an "upside surprise" when they complete their tax returns and find that they are due tax refunds from the IRS in an amount exceeding any refund they might ordinarily expect to receive?If so, how might that effect consumer spending during 2019?
It isn't that simple. The marginal rates, and the brackets changed. Not everyone gets a tax cut.A single person making under 9K/yr got no tax cut.A single person making 90K/yr only got a 1 percentage point cut in his marginal rate.A single person making 160K/yr got a 4 percentage point increase in his marginal rate.A single person making 210K/yr got a 2 percentage point increase in his marginal rate.Married filing jointly under 18K/yr got not cut.Married filing jointly at 405K/yr got a 2 percentage point increase in marginal rate.https://www.businessinsider.com/tax-brackets-2018-trump-tax-...Most people don't work out their withholding amounts themselves. They fill out the form for the number of deductions they claim and their employer works out the amount to withhold. iirc that was one of the big issues at the start of 18: the tax bill was passed so late in the year, employers did not have the information they needed to accurately calculate the correct withholding.I remember the reaction of average working people to the "big tax cut" in the early 80s: the difference in their weekly pay was something like $1.50.Steve
It isn't that simple. The marginal rates, and the brackets changed. Not everyone gets a tax cut. A single person making under 9K/yr got no tax cut.Does a person making $9000 a year owe income tax?DB2
Does a person making $9000 a year owe income tax?That is taxable income, after the standard deduction and whatever handouts they receive for having children, which puts their gross income/yr over $20K.Steve
I suspect that significant numbers of blue-collar workers and middle class salaried individuals may have intentionally or perhaps forgotten to change their withholding elections during 2018.I was told by my HR team that the new withholding tables provided by the IRS were designed to work with the old deduction/exemption W4's.
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