Sunday, February 3, 2019

Bill Crawford: What a Disappointing Tax Season

Started your tax return yet? I have and it's so disappointing.

I had looked forward to the simpler, easier tax filing promised by President Donald Trump's tax cuts. Take the increased standard deduction and forget all that work to compile medical and dental expenses, taxes paid, interest paid, charitable contributions, and so on. This was going to be a breeze.

Not.

Just realized I still have to gather up all that detail for my Mississippi tax return.

Blah!

The other disappointment was my federal taxes on personal income are about the same as last year. No big tax cut there. The only thing making a difference for me this year will be the 20% tax cut on qualified business income. My little bit of business income will save me a few tax dollars.

Of course, we all knew Trump's tax cut was really about slashing business taxes and easing taxes for high income individuals.

That's kinda the same story at the state level.

I get to enjoy zero taxes on my first $1,000 of taxable income. Woo-hoo!

That's where we are on phasing in the elimination of the first tax bracket for personal income taxes. That first bracket used to charge 3% tax on the first $5,000 of income. Now the first $1,000 is zero percent with the remaining $4,000 still at 3%. It will be four more years before it fully phases in and we get to enjoy the full benefit of that $150 tax cut (3% times $5,000).

Meanwhile, the majority of Mississippi tax cuts for business are in full force, e.g., the inventory tax cut, tourism project tax rebates, sales and use tax cuts, and corporate tax cuts.



In case you were wondering about some of these things, the Mississippi Department of Revenue published a notice last week with the following information.

In general with regard to Trump's tax cuts: "Many of the aspects of the federal legislation will not affect Mississippi taxpayers as Mississippi has its own statutory provisions for many of the changes. Therefore, the impact on Mississippi revenues will not be as significant as many other states."

With regard to increased federal standard deductions and elimination of person exemptions: "Neither of these changes affects Mississippi, as our statutes are specific to these items."

With regard to the 20% deduction for qualified business income: "Mississippi does not have a statutory provision for this deduction so it will be not be an allowable deduction on the Mississippi return."

With regard to alimony payments: "The federal law change repeals the deduction for alimony payments and the inclusion in income of the alimony payments to the recipient effective for divorce and separation agreements entered into or modified after December 31, 2018. Mississippi follows the federal rules for inclusion and deductions of alimony payments as provided in Sections 27‐7‐15(2)(e) and 27‐7‐18.

With regard to moving expenses: "Moving expenses will no longer be deductible except for active duty members of the military based on military orders. Section 27‐7‐18(2) provides the deduction from Mississippi income taxes in accordance with federal provisions."

To see the entire notice go to https://www.dor.ms.gov/Pages/Individual-Notices.aspx and download "Tax Effects From The Tax Cuts and Jobs Act."

Sigh.

So much for using my big tax refund to splurge on something.


Crawford is a syndicate columnist from Meridian.

15 comments:

Anonymous said...

The fed tax doesn’t bother me as much as our state tax. Still taxing high rates on corporations with nothing to substantially show for it. No new job or workforce training but lots of state employees who get trained on our dollar while we have to train our employees also from the very bottom up. What I’m saying is, it’s hard to train an employee when all he has ever been taught is to run with a ball or dribble a ball. They have no basic math or language skills or work ethic. See where I’m going with this? But let’s keep throwing money at these school districts and PERS.

Anonymous said...

We have been using H&R Block's TaxCut software since 2000, and highly recommend it.

I did our taxes on Friday. It took about 1.5 hours total.

Easy schmeezy.

Anonymous said...

So Bill, do you not enjoy the tax cuts that do exist, no matter how you feel they are miniscule, less than you enjoy those tax increases you and the Democrat legislature enacted durING your stint in the Mississippi legislature?

You remember those times, don't you? It was those years before you dropped out of the Mississippi Republican Party so you could support Ray Mabus and his 'highly successful' tax and spend (and spend, and spend) administration?

Anonymous said...

Ive had a bigger pay check all year long because of Trumps tax cut. Not expecting some wealth building miracle upon filing.

Anonymous said...

Did the guy who tried to act like a president and failed miserably ever give us any type of tax cut? Nope! He said we could keep our health plan. We couldn’t! Wound up paying a $6,000 per tax because we lost our policy. Couldn’t afford a new one. So, yes, I’m enjoying the tax cuts. All the left wants to do is down trump.

Anonymous said...

11:15 - If you don't know about workforce training in this state, you either exist in a vacuum or you think you have no need to investigate. Contact your nearest community college, as a start.

But keep right on with your mantra-bitching about PERS and all the systems that fail you. That's why your business sucks and is going down the drain.

Anonymous said...

Your existence is so f'ing dreary Crawford it is a wonder you haven't offed yourself yet.

Anonymous said...

I live on IRAs now in the State of Tenn. What does that save in taxes over Miss. ? About 3%?

Anonymous said...

Trump's tax cut was pretty good for me. I don't think the average sucker who voted for him did well though. The used car lots are full and it doesn't look like they are selling as fast as in years past.

Anonymous said...

Yes, Bill, as a matter of fact I did my tax return this weekend. Our AGI was up by 8%, our charitable contributions were down by a few thousand somehow (not sure how I missed that before 12/31), yet our taxes were 10% less in 2018 than in 2017. And by opening a couple of 529s to pay our kids’ private school tuition, we’ll get an extra $1000 on our state refund.

I’d tell you to find something else to bitch about, but I don’t have to. You’ll do it next weekend regardless. How miserable must you be to never find a single positive to write about? I assume you still live in Meridian. Please relocate ~20 miles east and forget you knew us.

Anonymous said...

We just wrote the biggest tax check ever. The people being killed are the upwardly mobile professionals and salaried employees who make it to $158000 a year ( and that's not hard for a 2 income family). The jumps get bigger but the cash flows get smaller.

Businesses were helped no doubt as were those with incomes nearing $1 million but professionals continue to be the " tax 'em" target.

Worse, professional groups of any size are forced to invest in 401Ks and IRAs where they can't buy and sell stocks as our parents used to be able to do. They have to buy " funds" which always seem to have a " dog" in the group and are only as good as the fund manager. We aren't notified if the good fund manager leaves. Gone are the days when one had individual paper stock certificates in their safety deposit boxes. And, you can't buy gold as our parents could.

And, professionals are required to make the "maximum contribution" as partners which means they can't have that cash to invest themselves but it's a group investment.

If someone donates goods valued over %5000, they have to pay an appraiser to put a value on those goods. So much for donating a painting or first edition book or historical item without being out of pocket. So, those who will be retiring or going into assisted living will get hit badly or their heirs will.

Then at 70 1/2 years old , a professional or manager are forced to take " draws" from their IRAs and 401Ks which means the best funds get sold to benefit the investment group that manages the money.

Hope to live long enough to retire. If allowed to manage my own money and not pool what I'd invested before the tax/interest shenanigans Wall Street and banks lobbied for and received decades ago, I could have retired 7 years ago. I've tracked how my long ago chosen investments have fared. I'll be lucky to retire at all.

I want tax reform where everybody has the same deductions and the bracket percentages have smaller jumps, and are mandatory with no deductions . I want to be able to self-direct my investments and not pay a money manager to buy and sell but just to administrate. I want all interest rates tied to the prime again so the interest on a dollar saved is again closer to that of a dollar borrowed. I want loan sharking laws again that are tied to the prime.

If you think there were " golden years" and want them back, start with the money! Read economic history. We aren't a capitalistic society anymore and it's NOT only because of social programs out of control , it's because you are getting gypped and scammed by business becoming criminal enterprises.

We could have universal health care and get rid of hunger If a good corporate profit was seen again as 20% after all expenses and bonuses were low 6 figures not 7 or 8!

We will soon be a militarized oligarchy. Eventually that system fails whether it's last as long as Rome or as short as Venezuela's.


Anonymous said...

Used car lots are full because they are trade-ins from the purchase of new cars. Car lots purchase their cars at the auto auctions, which is where the new car dealers sell their trade-ins.

Anonymous said...

@9:17 is only hamstrung because they choose to be hamstrung.

Anonymous said...

9:20 ask any car salesman, new or used and thy will tell you that this has been one of the worst January sales month and window shopping in anticipation of February and March purchases doesn't look good either. Everyone in the car, furniture or home impovement business knows that refunds are going to be smaller.

Anonymous said...

11:37 you aren't lying. Just bought a new SUV Lexus. Had 3 dealers bidding - it was WONDERFUL. Glad I waited until late January.

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