Get Ready for a Nasty Tax Season Surprise

[soulezoo]

Do they add interest to the installments? If not, I'd pay the installments before I'd sell anything.

We had to pay about 3 times more beyond what we deducted than we did last year, a lot of that was due to my wife being able to retire early, we still haven't really got the whole retirement budget thing figured out yet. So I'm not sure how the tax cuts impacted us.

About ten years ago, when we paid off our house and had to start paying taxes and insurance (which formerly had been escrowed) it was an eye-opener to me just how much those items cost.

And this is why we are truly enslaved by our Government. You never really own your house. You are just leasing it from the Government at a rate non-negotiable to you. Disagree? Stop paying those property taxes and see what happens.

[Doc Safari]

And this is why we are truly enslaved by our Government. You never really own your house. You are just leasing it from the Government at a rate non-negotiable to you. Disagree? Stop paying those property taxes and see what happens.

It's worse than that. I'm being penalized for not paying enough taxes to withdraw some money from a retirement account to pay some debts. I'm literally having to pay more of my own money to the government to get to my own money in a retirement account. That's like telling the bank you want to withdraw some money from your account and they tell you, "Okay, but we get to keep a big chunk of what you take out as our tip."

[Mjolnir]

And this is why we are truly enslaved by our Government. You never really own your house. You are just leasing it from the Government at a rate non-negotiable to you. Disagree? Stop paying those property taxes and see what happens.

Yep.




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[Outlander Systems]

This dude knows whassup.

And this is why we are truly enslaved by our Government. You never really own your house. You are just leasing it from the Government at a rate non-negotiable to you. Disagree? Stop paying those property taxes and see what happens.

[Crow Hunter]

It's worse than that. I'm being penalized for not paying enough taxes to withdraw some money from a retirement account to pay some debts. I'm literally having to pay more of my own money to the government to get to my own money in a retirement account. That's like telling the bank you want to withdraw some money from your account and they tell you, "Okay, but we get to keep a big chunk of what you take out as our tip."

Are you 100% sure that you did all your taxes correctly?

I am not trying to be mean but the only people that had their taxes increased this year were people in very specific circumstances. The vast majority of the tax paying populace got a fairly significant reduction. Only those who live in a high property/income tax state and/or relatively large mortgages are getting hit by this.

Do you have a large mortgage or very high property/state income taxes? Such that you normally file a Schedule A with greater than $12,000?

If not, there may be a mistake that is hitting you.

If you are needing to pay $3,000 more then you likely had at least $14,000 more in income that you didn't pay taxes on. That is over $1,000 a month.

Now if you took money out of a retirement account you should have been prompted to withhold at least 10% as a default and you would have to actively choose to not have the withholding. If you chose to not have that money withheld, that is on you.

Retirement money in an IRA, 401k, 403b, etc has never had taxes taken out of it. So you HAVE to pay taxes on it when you take it out. So your representation isn't really accurate. It isn't the same as a bank account where you have paid taxes on it and continue to pay taxes on it as it earns interest. Money in a retirement account didn't have taxes paid on it when you put it in and you didn't pay taxes on the earnings until you take it out.

It wouldn't be fair for you to take money you saved and spend it without paying taxes on it.

If you want to PM me some general information I can try and help you work through it and see if there is something you might have missed/done wrong. I help people with taxes all the time.

[Crow Hunter]

And this is why we are truly enslaved by our Government. You never really own your house. You are just leasing it from the Government at a rate non-negotiable to you. Disagree? Stop paying those property taxes and see what happens.

Actually that is 100% true. Unless you have some very special land with Allodial title, you DON'T actually own it.

You "own" it via fee simple which is actually a form of feudal ownership handed down for centuries. Where it used to be that the King owned the land and you as a feudal lord worked the land via your serfs for the King, now, you own a feudal title to property owned by the State.

You will not ever get Allodial title to it either, that is very, very rare. The idea that a person "owns" property is a complete misrepresentation of actual law and is very often misunderstood.

https://en.wikipedia.org/wiki/Fee_simple

[26 Inf]

And this is why we are truly enslaved by our Government. You never really own your house. You are just leasing it from the Government at a rate non-negotiable to you. Disagree? Stop paying those property taxes and see what happens.

I frame it a little differently, but, yeah, I get what you are saying.

[Dr. Bullseye]

It's worse than that. I'm being penalized for not paying enough taxes to withdraw some money from a retirement account to pay some debts. I'm literally having to pay more of my own money to the government to get to my own money in a retirement account. That's like telling the bank you want to withdraw some money from your account and they tell you, "Okay, but we get to keep a big chunk of what you take out as our tip."

Doc, retirement accounts are the mechanism by which the government tracks your money. Think about an Obama-like dictator bailing-in the government by taking all the money in people's retirement accounts and then slowly paying it back to them--or not.

I am retired. Please consider I do not want a big bank account from which to dip into and live. This seems to be what non-retired people want. But what I really want is a source of income. All retired people need a flexible source of income, not a 401K or even a Roth IRA. Rental property would be great. Rental land would be great. A loan to a relative for that relative to buy a house would be great. The government really never knows the real or true value of what you have so it is hard for them to seize it or tax it.

[austinN4]

Rental property would be great. Rental land would be great. A loan to a relative for that relative to buy a house would be great. The government really never knows the real or true value of what you have so it is hard for them to seize it or tax it.

They could probably seize your RE holdings as easily as your 401K, but if it makes you feel better.....

[kwelz]

I ended up owing $2700 more than normal.