Taxes, Tax Cuts, and Tax Refunds

I will warn you right now, this is likely to be a rant; an up-on-my-soapbox-quit-your-stupid-whining kind of rant.

I also want to add a caveat: we have not yet done our taxes, so my rant has nothing to do with my refund OR lack thereof!

At the beginning of 2018, most people were so happy with the extra money they were receiving every paycheck because of President Trump’s tax breaks, myself included. But fast forward 12 months, to 2019, as people start filing their taxes and they are wondering why their refund is so much smaller than last year, or why they aren’t getting a refund, or why they owe a little bit. Figure it out, people. You can’t have it both ways! You don’t get more money in your paycheck every month AND a big refund at the end of the year! It doesn’t work that way.

I saw something on one of the major TV networks and I wish I remember exactly where I saw it because the news anchor broke it down like this:

She said, people that usually get a $1000 refund are mad because now they are not getting anything! But that they earned $90+ more every paycheck (after the tax cuts) which amounts to $2400 over the course of the year. Even subtracting their “usual” refund of $1000, they are still coming out on top with $1400 more dollars then they had gotten the year prior.

You can’t have tax cuts and tax breaks and a huge refund. The math doesn’t work that way.

Let me be the first to say I am no financial analyst, I am not a CPA, and I don’t know tax law. But I do understand logic, reasoning, and basic math. +$1400 overall still means more money in my pocket and the tax cuts we were promised.

I truly don’t understand how people expected bigger paychecks and bigger refunds.

I did not hear all these people complaining in March, April, or May when they were taking home bigger paychecks. They are only whining now that they aren’t getting a “big” refund. Really, what did they expect?

Last year, we received the largest refund we have ever received. We were shocked. We obviously don’t expect the same this year. In fact, as nice as a refund is, we hope it’s not too big. We hope we didn’t give our money to the government and waste time being able to build interest on it.

Refunds are nice, yes. But they are also not guaranteed and anybody who planned on getting a certain amount from the government in the form of a refund is crazy. People need to be realistic and understand that they did get the refund they were promised. They just got it in the form of small increments, every paycheck, over the course of the year. What they did with that money is their problem, not anybody else’s. If they frittered it away, that’s on them. If they weren’t responsible with the extra money they got in their paycheck every month due to the tax cuts, then they have nobody to blame but themselves!

I can tell you exactly where all out extra money went: it went to paying down debt. It wasn’t much, but every little bit helps. Whatever our paychecks increased by, so did our debt payments. If you did something else with your money, or don’t even know where your money went, why is that the IRS’ fault?

Sorry, rant over. I think.

But seriously, before you whine and complain, do the math. How much more was your paycheck every week? How much do you usually receive in a refund? Now, do the math and figure out where you really ended up? Did you come out on top? Like I said, we haven’t completed our taxes yet, but I think I will.