Happy Tax Day!

[spotty_dog]

So, how are you loving the new tax system?

We got a massive, massive tax cut. Income about the same as last year...self-employment tax about the same...regular tax down 25%. We were owed a ginormous refund from our estimated quarterly payments, but with nothing better to do with that money, we just let the government keep it against next year's taxes. Yay for being in the 1% I guess!

[SoonerTexan]

We also got an unexpected refund. And I was just notified our property taxes stayed the same this year...after 7 straight years of 10% increases (max allowed under TX law)

[TulipsAndSunscreen]

We got a small refund. I expected more but we got screwed on the removal of the ability to deduct moving expenses. It now only exists for military moves. That really sucked because we spent a lot moving (more than our allowance).


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[civilspouse]

We got a small refund. I expected more but we got screwed on the removal of the ability to deduct moving expenses. It now only exists for military moves. That really sucked because we spent a lot moving (more than our allowance).


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Oh man. That’s good to know. I was planning on this for our upcoming move. Bummer.


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[spotty_dog]

Yikes, that deduction was really helpful after our post-training move too.

[rufflesanddots]

We had so little income last year, plus having G, that we didn't have to pay. Last time we'll probably get a large refund.

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[TulipsAndSunscreen]

Yikes, that deduction was really helpful after our post-training move too.

Yeah no kidding. Thankfully we got it for the Texas move because we REALLY needed it (that was 100% self financed).


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[OrionGrad]

Happy Tax Day!

We came out ahead because we were able to use the pass-through deduction for K1 income from the surgery center and the physical therapy group. But just like SD, we’re putting it towards next year’s quarterlies, so it just feels like a wash. The better news is that since we didn’t owe anything, I used the money I’d saved for taxes to fund our backdoor ROTHs, so now those are done for the year too. 😀

[spotty_dog]

Which pass-through deduction, the standard S-corp loophole or the new QBI? The QBI was a big part of our tax break, probably five figures worth.

I...didn't do my backdoor Roth the last couple of years. I know it's use-it-or-lose-it space, but the prospect of a few dollars' tax benefit in 30 years when we withdraw it, compared with the hassle of writing a check and doing the conversion and reporting it correctly on the return, just feels pointless sometimes! I need to get on it for this year though, especially since we are CONSTANTLY trying to figure out what to do with our excess income. (Likewise, we don't do a Roth for DH because he has traditional IRAs that would make the conversion a pain in the ass. But I think he might be able to roll over his traditionals and free up that Roth option. I should look into that too...always something...)

[OrionGrad]

Which pass-through deduction, the standard S-corp loophole or the new QBI? The QBI was a big part of our tax break, probably five figures worth.

QBI. I hadn’t anticipated it applying for us, so it was a nice surprise.

I don’t know what you use for your Roths, but the process is super easy with Betterment. Just a couple clicks on the website and it’s done!

[poky]

QBI. I hadn’t anticipated it applying for us, so it was a nice surprise.

I don’t know what you use for your Roths, but the process is super easy with Betterment. Just a couple clicks on the website and it’s done!

How, exactly, did k1 partnership stuff qualify for qbi? Ours didn't, and when we asked our accountant about it, she said it was because they'd reported it correctly as guaranteed income, and that disqualifies it.

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[JaneDoe]

We had to file an extension due to the K1 from the surgery center not being finished on time. We do know that we owe a lot more. It’s due to to an increase in Dh’s income more than the tax code changes. We will not see any benefit from the tax code changes. We live in a high SALT (stare and local taxes) state, so losing the state income tax deduction was huge. But, our effective tax rate went down so it ends up being a wash.

[OrionGrad]

Happy Tax Day!

How, exactly, did k1 partnership stuff qualify for qbi? Ours didn't, and when we asked our accountant about it, she said it was because they'd reported it correctly as guaranteed income, and that disqualifies it.

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I’m not sure. The surgery center is 49% owned by a large corporation that owns lots of ASCs, and I guess the deduction applied based on how they did the K1?? They included a detailed explanation as a cover page to the K1 we received and gave to our CPA. The surgery center isn’t affiliated with the practice, so there’s no guaranteed income. Not sure if that makes a difference or not.

ETA: [MENTION=1049]poky[/MENTION] I just reread your post, and to clarify, I’m talking about an ownership stake we have in a local surgery center, not DH’s partnership. The partnership income did not qualify for the deduction.

[spotty_dog]

QBI. I hadn’t anticipated it applying for us, so it was a nice surprise.

I don’t know what you use for your Roths, but the process is super easy with Betterment. Just a couple clicks on the website and it’s done!

I didn't think it was going to apply either, but as a sole proprietor with a business driven by "performance of services in the field of health" it sure sounds like it's us! It feels like a dirty tax cheat even though it's straight up according to the law. >.<

I keep my Roth at TIAA, because I like to have access to their Real Estate investment vehicle. So the process for me is I send TIAA a check with a printed form, and then wait for it to post to my tIRA, then send them a printed form requesting the conversion, then wait for that to post, and then allocate the investment. And then at tax time when DH is going through the TurboTax it's always a headache about "Conversion or recharacterization?" (Conversion! I finally know in my bones it's conversion, LOL!) I'm sure it could be easier. For now though, the only motivation is the access to the Real Estate investment (I try to keep our allocation at 3.25% RE, and I don't love REITs, so I am actually really kicking myself for not contributing this year, because I'm way under.) But that said...I just did a quick math and even at a mediocre growth rate, a year of investment now is worth maybe $10-15000 tax-free dollars in retirement, or about $3-4000 less taxes at a time when we have no other income and want to not pay into the government if we don't have to. So that's maybe worth it. >.<

[diggitydot]

Our taxes dropped and so did our refund because of the new withholding rates. State taxes were about the same, though.