Amazon Will Pay a Whopping $0 in Federal Taxes on $11.2 Billion Profits

[NikLR 13,220]

I dunno how a married couple with a kid who each pay taxes as a single adult, and file MFJ owe the IRS money.  Something is wrong.  

[NikLR 13,220]

Hubs works for the govt. You think he cares if they get a yearly interest free loan? Lmao. It's his money. Trust me i wish he would do it differently but he wont. 

Edited February 18, 2019 by NikLR

[yuna628 9,528]

13 hours ago, ALFKAD said:

Yeah, I have to pay $1650 or so this year.  Have been adjusting my exemptions the past 5 years, but part of my income is variable (rentals), so it's tough to nail it down.  I was hoping to pay about $100.  TT says I owe a penalty of $17 for underpayment,  and even offered to add it to my tax due for me.  I said, "Naw, let the IRS bill me for going over the $1000 owed mark."  (From now on. I will leave the numbers where they are ,and just have an extra amount taken out, simple to adjust that each spring.)

 

Which I find interesting... have a self-employed friend who has filed taxes and paid full taxes due in April every year for the past 20-30 years.  Doesn't pay the quarterly estimated tax.  Has never paid a penalty, and he usually owes $8-10K.  Yet I get hit for a $17 penalty.  Hmmm.

 

I understand now what you meant by simple.  I agree that itemization and filing isn't that hard, buy have saved friends from costly mistakes doing dumb things like claiming mileage driven to work from home.  Another complication is working and living in different states.  Shouldnt be so hard.  File in your home state, and let the work state tale what they are entitled to from the home state.  But no... have to file in multiple states.

We went to our tax guy this weekend. Since hubby works in one state and we live in another, there's a bunch of forms to do. I'm hoping that we still have a nice refund but don't know yet. We will always owe the state we live in. My sister got significantly less this year and was pretty upset about it.

 

My husband still hates taxes and doesn't understand why it's so complicated.  He too hates overpaying the government in taxes, by letting them take the maximum out... as it is like an interest-free loan, but he does not have the confidence to do it any other way. I was always raised by the rule of ''you never want to owe the government'' and it is ''better to get it all back at tax time''. Whether this is really the best way, I don't know, that's how my family has always done it.... well except for the black sheep of the family that owes the IRS god knows how much by now..

[Dashinka 23,238]

53 minutes ago, yuna628 said:

We went to our tax guy this weekend. Since hubby works in one state and we live in another, there's a bunch of forms to do. I'm hoping that we still have a nice refund but don't know yet. We will always owe the state we live in. My sister got significantly less this year and was pretty upset about it.

 

My husband still hates taxes and doesn't understand why it's so complicated.  He too hates overpaying the government in taxes, by letting them take the maximum out... as it is like an interest-free loan, but he does not have the confidence to do it any other way. I was always raised by the rule of ''you never want to owe the government'' and it is ''better to get it all back at tax time''. Whether this is really the best way, I don't know, that's how my family has always done it.... well except for the black sheep of the family that owes the IRS god knows how much by now..

Did your sister actually pay more in taxes for the entire year, or was just the refund lower?  In my opinion, who cares if the refund is lower if one is paying less in taxes for the entire year and less has been withheld.

[Voice of Reason 10,298]

32 minutes ago, yuna628 said:

We went to our tax guy this weekend. Since hubby works in one state and we live in another, there's a bunch of forms to do. I'm hoping that we still have a nice refund but don't know yet. We will always owe the state we live in. My sister got significantly less this year and was pretty upset about it.

 

My husband still hates taxes and doesn't understand why it's so complicated.  He too hates overpaying the government in taxes, by letting them take the maximum out... as it is like an interest-free loan, but he does not have the confidence to do it any other way. I was always raised by the rule of ''you never want to owe the government'' and it is ''better to get it all back at tax time''. Whether this is really the best way, I don't know, that's how my family has always done it.... well except for the black sheep of the family that owes the IRS god knows how much by now..

I’m sure we all start out our adult tax lives like this, because we are not properly educated in school nor at home.  I have no idea what my parents’ taxes were like; they never discussed it with me.  Nor saving money, because they never saved.  My dad was always the “if there is money in the checking account, I can write another check” type.  Mom tried to save, but wasn’t able to unless it was cash in a cookie jar. (So I hear you loud and clear, @NikLR!!). My brother always has the max taken out, and is so happy when he gets a return of $10,000.  But what a waste of interest!

 

In your situation, I would calculate how much you owe the states (assuming you owe in two due to your situation), divide by 12, and have that additional amount taken out each month (unless we are talking a few hundred, and if you maintain sufficient savings that paying such won’t hurt your budget).  Federal can be done the same way, sort of, using the W4 calculator thingy.  The ULTIMATE goal is $0 at tax time.  Means you paid what you owe, and no more.

 

What I am talking about will most likely not really net you much money, and some folks will probably operate with the idea of “it’s not worth the effort to save money, and I’d rather be safe than sorry”...  But my bank just offered me a 6-month CD at 3%, which is a VERY good deal.  Let’s say I think I will owe $2000 next year, so I purchase a $3000 CD just to be sure.  In two periods, I will have earned 

$90 in interest, plus have the $3,000 in principal, which allows me to pay my (underpaid on purpose) taxes, which ended up being $1350 next year (hypothetical).  Now if I put another $1350 in with the $1650 remaining, I am back up to $3000, plus the $90 in interest, and I start another CD for 2 6-month periods.  Next year, I will have made $92.70 in interest, and my taxes will be covered without fear of where will the money come from.  Doesn’t sound like much, right?  But in 10 years of doing this tiny little thing, I will have earned $1031.90 in interest.  After 20 years, the interest will be $2418.74. Or, I could keep letting Uncle Sam use my money for free and have earned $0.  (Of course, this example takes on new meaning if a person owes say $10,000 a year in taxes).

 

It’s not always easy to see the benefit of savings, and as Americans, or at least lower-to-middle-class Americans, we don’t tend to educate our children well on finances.  I know I wasn’t.  I started early with my kids - Every dollar they got for Xmas, birthdays, etc., they had to give me 25% to put into their savings accounts.  They grumbled about it at first, of course.  But after a year or so of it, my son was smart enough to ask me what his balance was one day.  When he saw how much was in the account (around $1200 IIRC), the lightbulb came on full-bright.  He would give me most of his gift money.  When I asked if he was sure, his response was, “Yes, I don’t really need anything, because you take care of all my needs.  The stuff I want is often sill.  I’d rather have money in savings!  Voila! I though.  Success as a parent.

 

Years later, I tried to convince my son to start a ROTH IRA at 17.  He dragged his feet, but I was relentless.  After he left home and was working on his own, I would text him every so often, reminding him how easy it was to start saving $50 a month.  Once, I emailed him a chart showing him how, at his young age, he could be a millionaire by age 35 if he followed my advice (something which I wish MY parents had shown me!!).  He finally got started, though I don’t think he is maxing it out yet, meaning millionaire status is pushed back several years, sadly).

 

It’s all about education.  It’s too late for me to ever make it big in the money department, but I am hoping my kids will see the value in saving, and pass it on to THEIR kids by starting the investment into my grandkids the day they are born.  THAT’S the time to start saving, at birth.

 

Best of luck to everyone here, tax time is never fun.  But it’s a necessary evil.

[Steeleballz 7,550]

27 minutes ago, Bill & Katya said:

Did your sister actually pay more in taxes for the entire year, or was just the refund lower?  In my opinion, who cares if the refund is lower if one is paying less in taxes for the entire year and less has been withheld.

 

   Withholdings were generally set too low with the new tax law. Most people will have a lower tax burden, but people may end up paying because they didn't have enough withheld. 

Edited February 18, 2019 by Steeleballz

[yuna628 9,528]

16 minutes ago, Bill & Katya said:

Did your sister actually pay more in taxes for the entire year, or was just the refund lower?  In my opinion, who cares if the refund is lower if one is paying less in taxes for the entire year and less has been withheld.

Honestly couldn't tell you. But she did say her refund was very much lower (think last year was about $1500 and this year was maybe $800, and she received even less from the state too). I think that most Americans like having a large sum that they will use on other things. Most years she would have put that toward big bills or to try and make some home repairs.

 

13 minutes ago, ALFKAD said:

I’m sure we all start out our adult tax lives like this, because we are not properly educated in school nor at home.  I have no idea what my parents’ taxes were like; they never discussed it with me.  Nor saving money, because they never saved.  My dad was always the “if there is money in the checking account, I can write another check” type.  Mom tried to save, but wasn’t able to unless it was cash in a cookie jar. (So I hear you loud and clear, @NikLR!!). My brother always has the max taken out, and is so happy when he gets a return of $10,000.  But what a waste of interest!

 

In your situation, I would calculate how much you owe the states (assuming you owe in two due to your situation), divide by 12, and have that additional amount taken out each month (unless we are talking a few hundred, and if you maintain sufficient savings that paying such won’t hurt your budget).  Federal can be done the same way, sort of, using the W4 calculator thingy.  The ULTIMATE goal is $0 at tax time.  Means you paid what you owe, and no more.

 

{...}

Last year we got back a big chunk from the Feds, somewhere around $2k maybe? and about $400 back from the state where he works. We owed MD about $600. We put that money to good use at the time as there was a bunch of emergencies (whenever we try to start saving *SOMETHING* always happens!). My dad has no savings to speak of, never did.... he's old now, is his attitude, and his kids have to spend what little they get to take care of them you know? It's frustrating... 

[Steeleballz 7,550]

13 hours ago, ALFKAD said:

I wouldn't be surprised if it takes into summer, especially with the shutdown.

 

I always file paper on April 13th, even when I got refunds.  Will do the same this year, owing them.  So I'm hoping I won't hear about the penalty at all, or at least not til September or so.

 

I read the instructions for the 2210, thinking I could estimate it while I'm sitting here wasting time.  No dice.  Gotta go line by line, with a slowness.  Darn convoluted IRS forms...

 

Why can't it be... "You underpaid by this much.  Multiply that amount by 0.02654, and that is your penalty"??  It could be so simple.

 

Back to my friend's situation... how could a person pay zero taxes throughout the year, write a check for X or XX thousand dollars every year at tax time, and never have to pay a penalty?  When we discussed the penalty last year, he genuinely believed I was making it up.  

 

   If you do end up owing the penalty, it does end up being something like that. For some reason, the IRS just isn't able to do things the easy way. 

[Dashinka 23,238]

5 minutes ago, Steeleballz said:

 

   Withholdings were generally set too low with the new tax law. Most people will have a lower tax burden, but people may end up paying because they didn't have enough withheld. 

Personally, I would rather pay then give the Feds the ability to use my money that should not have been paid.  I really hate when tax refunds are treated as, or reported as a sort of government welfare program.  As @ALFKAD showed, anyone responsible can make sure they have enough to pay their taxes and get some interest on the side.  Quite honestly, I think "withholding" is a joke and makes us out to be irresponsible, I would much rather get my entire pay, then set up CDs or other interest bearing accounts and pay my taxes either quarterly or annually.

[Steeleballz 7,550]

8 minutes ago, Bill & Katya said:

Personally, I would rather pay then give the Feds the ability to use my money that should not have been paid.  I really hate when tax refunds are treated as, or reported as a sort of government welfare program.  As @ALFKAD showed, anyone responsible can make sure they have enough to pay their taxes and get some interest on the side.  Quite honestly, I think "withholding" is a joke and makes us out to be irresponsible, I would much rather get my entire pay, then set up CDs or other interest bearing accounts and pay my taxes either quarterly or annually.

 

  I agree, but for someone who doesn't pay attention to withholdings and just assumes that they got calculated correctly, they might be surprised if they got a refund last year but have to pay this year. I noticed right away last January that my wife and I were paying too little. We were each getting ~$150 less taken out for federal taxes. There was no way our income tax owed was going down by ~$8000. 

 

  I generally don't care if I get a refund or owe, but I want it to be in the range of about $100 either way. 

Edited February 18, 2019 by Steeleballz

[Voice of Reason 10,298]

1 hour ago, Steeleballz said:

 

  I agree, but for someone who doesn't pay attention to withholdings and just assumes that they got calculated correctly, they might be surprised if they got a refund last year but have to pay this year. I noticed right away last January that my wife and I were paying too little. We were each getting ~$150 less taken out for federal taxes. There was no way our income tax owed was going down by ~$8000. 

 

 I generally don't care if I get a refund or owe, but I want it to be in the range of about $100 either way.

 BINGO!  On the bold part.  

 

To illustrate the tax law difference, my income went up from 2017 by an amount that should have cost me an additional $1836, when in fact, my taxes only went up $864, resulting in $972 more in my pocket.  This is my actual tax savings realized with the new tax law.

[Voice of Reason 10,298]

2 hours ago, Steeleballz said:

 

   If you do end up owing the penalty, it does end up being something like that. For some reason, the IRS just isn't able to do things the easy way. 

I ran the 2210 just now.  Line 14 ended up being $642.  If I pay 4/15, that’s $23.13.  If I pay today, I only have to pay $17.38.  Looks like Turbo Tax was spot on.

 

The penalty ended up being 3.603% of the amount underpaid (90% of total tax minus what I actually paid), with a discount of 0.016% per day if paid prior to 4.15.

 

Still gonna wait and let them calculate it and send me a bill.

Edited February 18, 2019 by ALFKAD

[beloved_dingo 1,932]

3 hours ago, Steeleballz said:

 

  I agree, but for someone who doesn't pay attention to withholdings and just assumes that they got calculated correctly, they might be surprised if they got a refund last year but have to pay this year. I noticed right away last January that my wife and I were paying too little. We were each getting ~$150 less taken out for federal taxes. There was no way our income tax owed was going down by ~$8000. 

 

  I generally don't care if I get a refund or owe, but I want it to be in the range of about $100 either way. 

It took me awhile to realize this is actually the best case scenario. I got a refund this year of $65, which is the lowest refund I've ever had. But, I also had more money in my pocket last year than I've ever had. 

 

Definitely better to have more at your disposal throughout the year - and save $$$ on your own - than to count on money back from the government once a year. 

 

A lot of low-income people (myself included, in the past) get in a cycle of depending on that once a year refund. They don't even attempt to save, or save very little, and then wait to deal with major expenses at "tax time". It just creates a vicious cycle that only keeps poor people poor. 

[X Factor 1,110]

20 hours ago, ALFKAD said:

https://www.irs.gov/pub/irs-pdf/f2210.pdf

 

I haven't run the numbers on this manually yet, but I plan to just for the exercise.  But as I said, the IRS will have to send me a bill for $17 before I pay it.  It's the principle of the matter...

 I have been overpaying for most of the past 35+ years, and they never gave me a dime of interest.

 

I got a refund last year, so I think I qualify for the 100% rule, but TurboTax says otherwise.  I'll run the 2210 myself and see what shakes out.

I used various software and had worked a few tax seasons for H & R Block. I discovered a nearly free software for doing taxes. The Federal is free and the state is under $13 to file. I did my sister and husband taxes with multiple rental property, a like exchange property transaction and the software at https://www.freetaxusa.com was as simple as TurboTax and the H & R Block software. So if you are familiar with doing your own taxes give it a try. I have been using https://www.freetaxusa.com for more than 7 years. I haven't done multiple states with them but that shouldn't be an issue. 

[NikLR 13,220]

I personally always try to make sure I don't owe and don't pay.  In Canada it worked out pretty much where I got a very small refund.  Hubs paid once, like $200 and flipped out.  Now we get large refund.  Cest la vie.  I'd gladly take the money and shove it into a savings account each month.