I just finished doing our taxes with TURBOTAX DELUXE (including New York State taxes). You would think that doing taxes with just four sources of income–Diane’s pension and Social Security, my pension and Social Security–whipping through the Income and Deductions (we don’t have any that count with Trump’s new tax structure) would be a breeze. Nope. There’s still the Audit Risk Meter to contend with. Fortunately, we’re at Low Risk of an Audit based on our tax return.
The last few years we’ve had to pay both New York State and the Feds because we were estimating withholding from my pension and Social Security (I just started collecting it in the Summer of 2019) while phasing out Spousal Benefits. And our estimated withholding needed to be tweaked. Now, we’re getting pretty close to breaking even. We owe New York State ZERO! We owe the Feds a small amount. That’s about as good as it gets. With Trump’s tax strategy of forcing most people to take the Standard Deduction, our years of getting refunds are a thing of the Past. Have you done your taxes? Are you happy or sad?
I do my own. My taxes are very simple. I only have two sources of income, my social security and my IRA. I didn’t pay any federal taxes and don’t owe any so that’s pretty easy. I paid some state tax but I get it all back. It took me less than an hour to do my taxes.
Steve, same here. I was done doing my taxes in under an hour. TURBOTAX transfers data from last year’s return to this year’s return. That saves a ton of time and cuts down tedious data entry. I could have saved even more time if I downloaded tax data, but I don’t trust that step so I manually enter the numbers.
Taxes are never simple, imho. Dropped off our paperwork the other day. I hate to owe but I also hate to get a sizable chunk back (although, between the two options, I’ll take the latter) because it means we over-withheld. 2019 will probably be the last year we can claim any of our kids as dependents, so that aspect will have to be taken into consideration for 2020.
Deb, the goal of the TRUMP tax structure now is to force most tax payers into the “Standard Deduction” mode. And, when you and John start collecting Social Security, you’ll have to adjust your withholdings. This is the third year of “tweaking” our withholding with my pension and Social Security and finally we’re almost at break even (which is my ultimate goal).
We’ll do ours when we get back to New York. In recent years we’ve come closer to breaking even too. I made sure we took 15% withholding on the money we had to take from the IRAs, etc. now that we’re past 70 1/2 (although my cousin said it was changed to 72 this year?). Last year we actually got more money back than we have in several years ($600 federal, $125 state). We’ll see how this year goes.
Jeff, if you’ve started IRA withdrawals you have to continue them. Diane was scheduled to take her first IRA withdrawal in April 2020, but with the new law allows Diane to wait until she’s 72 to start taking money out. I, the other hand, was forced to make an IRA withdrawal in December 2020 so I have to continue to make withdrawals even though I don’t want to.
Yes, ours are done. Very small state refund from Oregon, about $600 owed to Fed, which we just sent off. That’s better than last year, but we had to jack up our withholding and estimated to do so. We do have enough to itemize, but there are lids on that too. The FU***NG Trump “tax cut” really hurt us. We pay to get our taxes done, but may go to Turbo next year, as our tax lady sold her business to H&R Block and we do not like them.
Rick, you will like TURBOTAX. It walks you though the whole process step-by-step. You can file electronically (we did) and doing your takes becomes even easier the following year when you can transfer information instead of having to input data again.
I used Turbo Tax until we moved to Oregon, when it got complicated by my pension not withholding here. But now that we have some returns to follow, it should be okay.
Rick, for our relatively simple financial circumstances, TURBOTAX does the job just fine.
As for your taxes, good job. Coming out even is always the goal.
Rick, I was pretty good at breaking even or even getting a small refund for years under the old tax system. But the TRUMP tax structure locks us in to the Standard Deduction. No wiggle-room!
I’ve been using TurboTax for years but am thinking it’s gotten too complicated for my pretty simple income. With TurboTax there seems to be tons of stuff I have to plow through that’s now irrelevant. A couple of people whose taxes are similar to mine have recommended FreeTaxUSA, and I’m going to give it a look. In Georgia my state retirement is mostly nontaxable, so I have to pay the Feds but get back from the state more than I paid to the Feds, so it works out well.
Michael, same here in New York State. The convenience of TURBOTAX–basically the familiarity since I’ve used it for 20 years–and the ability to e-file makes it a no-brainer to me.
The “tax cuts” hurt me also instead of getting back $ last year I had to pay $500 fed (nothing state) and that was including a lot of dental work. This year with more medical and dental charges ($21K) I have to pay $850. I have an accountant that does this. Last year I paid the estimated and adjusted my withholding on my pension, and this year I’m going to have my SS withhold $$.
I’m surprised that you, George, don’t list interest on investments, stock dividends, etc as a source of income. Due to higher interest rates, I earned more last year than previously, and the med/dental didn’t offset it. I was planning to take more out of an IRA this year, to close the account and get out of that bank, but can’t do it. sigh
It really makes me angry to know I pay more than amazon
Jeff, my accountant also told me the new date to withdraw from IRA’s is 72
Maggie, all my stocks and other investments are in a tax-free Roth IRA. I also have a traditional IRA that I’m forced to make withdrawals from now that I’m 70 and 1/2. With the Stock Market cratering over a 1000 points a day, I’m sure plenty of investors will have tax issues next year!
I am still under the 70 1/2 age, so can wait till 72 yippee
Last year I went to a meeting about my deferred comp. I had always thought if I take $$ out I would not earn any interest. I’m glad I went to the seminar, because they explained that if I sign up for monthly sum, interest would stop, but if I just took it out (the required amount) once or twice a year, I would still earn interest.
I just began withholding on SocSec, and talked with my accountant and am closing the one IRA (they only pay .15% interest and charge $25/year) I was going to just take 60% of it this year, but decided to take it all. The bank is weird they don’t put my cd acct on my statement, and to find out, the tellers can’t tell me, and I have to see a banker. I can’t find the balance on the IRA without calling their retirement service. My cpa’s office manager said that the branch of that bank that is in their building is like a ghost town.
Maggie, with the Federal Reserve cutting interest rates (perhaps to 0%) most banks will resemble ghost towns!
We took it out last year before they changed the law, so as George said, you have to keep doing it. We have the TDA money coming in May or June, the money from the IRAs in November and the money from an IRA from my parents in September, so it is spread out nicely. Not that it is that much, but Jackie considers it a little raise.
I think my soc sec raise was 1% this year My pension raise was 3%
I got one of my best, and one of my few, refunds last year! Thanks, Trump! The heck with Turbo Tax! I do my own taxes and if I screw up the IRS tells me and adjusts my refund or payment! I’d get more, but Linda won’t take any withholding on her pension!
Bob, some people up their withholding in order to get a refund every year. Of course, that means the Government is getting an interest-free loan.
since I pay a cpa, it costs more for the forms, so I prefer getting a small refund, will probably just take another year or so to get things straight. No more (hopefully) big dental or medical bills though after 2019.
Maggie, with much of the TRUMP tax structure, deductions have to meet certain limits, typically 10% of Adjusted Gross Income. It’s hard to hit that number to qualify for a deduction.