I just did my taxes and feel like I got hit pretty hard this year considering I’m a single 26 year old making under 40k.
I did take out about 1k in long term investments last year before the election. I usually stick to the set it and forget it method but I figured stocks were pretty high and I was under the impression that with my income I would have no long term capital gains tax so I was taking a bit of a gamble. Since I might not be in this tax bracket for long.
I also cashed out some long term loser stocks mostly because they were gamble stocks I bought when I was young and my portfolio was a bit too crowded but I figured even if I got taxed on some of the long term capital gains I could offset with some of the loses.
I used H&R Block and was already charged extra for filing my investments.
I purposely paid extra toward my federal income every month just because last year I owed money come tax season. Based off my last years taxes I should have gotten back at least 1k-1400 with the extra money I payed every paycheck instead I only got back 300
I’m a little upset.
Basically my question is was there something I was supposed to do other than give H&R Block my vanguard documents, it said it guaranteed a maximum return. I made sure when I cashed out my investments I used fifo so I don’t know why I owed the irs $1000 more this year than last? That was basically 100% of what I cashed out which obviously isn’t how capital gains would work in any tax bracket? Is it just that this year everyone paid more taxes?
TLDR: I make under 40k a year and took out 1k in long term stocks last year and my taxes were 1k higher than last year with no change in salary. Was I supposed to file differently than just paying H&R Block to file or were taxes just higher