Why am I paying more after the 2017 tax overhaul?

My spouse and I are in the 100–200k range and file jointly. We used always to receive a refund, but with the Trump tax change, we suddenly started owing between $3 and $5,000. Our tax bracket is lower than it was before the 2017 tax reform, despite my initial assumption that it had increased.

Why is that? Was there an irritating method that my W4 was automatically changed? (this seems to be the solution but I need confirmation)

Our salaries haven’t altered in any other way.

Many have pointed out a discrepancy between the amount of taxes I paid and the amount I owed. Although I believe my query was badly phrased, I do understand this.

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Whether you have paid enough in advance of taxes is reflected in any refunds you may receive at the end of the year. That doesn’t mean anything has changed. unaffected by the amount of taxes paid.

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It’s possible that you and your spouse don’t withhold enough money if you both work and your W-4 forms aren’t properly filled out to represent two incomes. :thinking: :thinking: :thinking:

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In recent years, there have been changes to the W4 withholding mechanism and tables.

If you were able to take advantage of the TCJA’s lower itemized deductions for high state taxes

The TCJA eliminated the benefit of 2% unreimbursed employee expenditure deductions.

If you don’t qualify for options 2 or 3, the difference is in withholding rather than tax bracket.

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Thank you, :hugs: :hugs: I believe this is the crucial element. Despite filing jointly for numerous years as a married couple, we had no problems until maybe 2018.

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That’s about when the W4 procedure was modified. Correction: the year was 2020. :yawning_face: :yawning_face:

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Receiving a tax refund or “owing” has little to do with how much tax you owe for the whole year.

All that indicates is that you have an interest-free one-year loan from the government if you receive a refund (too much was deducted from your pay cheque). If you owe after filing your taxes, the opposite is true.

For information on your whole tax liability for the year, please see Line 24 on your Form 1040.

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Did you once itemize a sizable portion of state taxes? Did you both have a lot of unpaid work-related expenses, such as home offices? Or did your tax preparer act as though you didn’t? Since 2017, have any of your kids turned 17?

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They modified the withholding on W-4.

People now owe money at tax time instead of receiving a refund.

This indicates that they just increased their salaries for the year to boost the economy.

This is unrelated to the actual amount of taxes you pay.