2023 Tax year time

[bobbiwoz]

We have filed and expecting a refund from both IRS and state. Because DVC is due before February 15, we prefer to get refunds and plan accordingly.

 

[georgina]

We have filed and expecting a refund from both IRS and state. Because DVC is due before February 15, we prefer to get refunds and plan accordingly.

Wow. Vanguard says we will have our last 1099 by Feb 11. The account has some mutual funds from other companies, which is why it takes longer, they say.

 

[mgarbowski]

But we will stop IRA withdrawals this year so we may actually had zero tax liability a year from now.

I'm puzzled how one stops IRA withdrawals, because once they become mandatory they just remain mandatory. I'm guessing either (1) you made withdrawals before you reached the mandatory age, and will stop until you hit that age, or (2) you took more than mandated and emptied out the IRAs.

Is it one of those two or am I missing something? Thanks for any info you're willing to share.

 

[disykat]

I've been dreading it as usual. DH does ours so no real problem, other than helping him gather stuff and how much we owe of course. It's pretty straight forward but I doubt we figured it withholding out correctly for our first year of retirement. DH was retired all year; I was part time half the year. Next year should be easier.

I do the work on my mom's. The last few years we had Dad's estate and then selling their house in the mix, but this year should be pretty straight forward. I hope so, since we have a vacation planned end of March beginning of April. We have to get them done earlier than we usually do. I should probably start compiling all of her medical deductions.

 

[tvguy]

I'm puzzled how one stops IRA withdrawals, because once they become mandatory they just remain mandatory. I'm guessing either (1) you made withdrawals before you reached the mandatory age, and will stop until you hit that age, or (2) you took more than mandated and emptied out the IRAs.

Is it one of those two or am I missing something? Thanks for any info you're willing to share.

Regarding my IRAs. I started withdrawals at age 64 and am suspending them at age 66 1/2 as I have reached full Social Security retirement age and have started drawing those benefits. Yes, at age 73 I will be required to start mandatory minimum withdrawals. You can start IRA withdrawals without penalty anytime after you reach age 59 1/2. So if the financial need arises, I could resume monthly withdrawals, or make a one time withdrawal.
HOWEVER, that is assuming the laws don't change. Because until recently mandatory withdrawals used to be required at age 70. They changed that law.
And another law that changed impacted my mom's IRAs. They USED to allow you to average your life expectancy with the life expectancy of your beneficiary to reduce how much you had to take out. They divide your IRA balance by the number of years you are expected to live to determine the minimum withdrawal amount. It would be assumed that your beneficiary is younger, so it would decrease the amount you were required to withdraw. It also gave me, after my mom passed, the option of either cashing in her IRA, or continuing the withdrawals at the same rate she was. So I have been drawing on my mom's IRA for 10 years now. Under current law, beneficiaries have 10 years to withdraw all the money in an IRA. They can do it any way they like, all at once, a little bit at a time, or everything 10 years after the death of the account holder. It just has to be all withdrawn within 10 years. That will be what my beneficiaries face when I die.....unless or course they change the law again.
I found a fact sheet from my bank on IRAs from 1979, back then the law allowed people to withdraw money from an IRA without penalty, any time they wanted, IF the money was being used to buy a house, pay medical bills, or fund college tuition. That law changed too, decades ago.

 

[Skippy918]

We’re worried about a huge tax bill cause of hubby’s business. It did well, but it’s all pass through to our tax return.

 

[Rex1993]

I'm puzzled how one stops IRA withdrawals, because once they become mandatory they just remain mandatory. I'm guessing either (1) you made withdrawals before you reached the mandatory age, and will stop until you hit that age, or (2) you took more than mandated and emptied out the IRAs.

Is it one of those two or am I missing something? Thanks for any info you're willing to share.

You can stop mandatory withdrawals, you just end up paying the excise tax penalty (the SECURE Act reduced the penalty for 2023 and beyond). However, even as recently as 2020 MRDs were suspended for everyone under the CARES Act. IRA rules are complicated and have changed dramatically over the past three years.

 

[EACarlson]

I usually get up early on a Saturday in late February and do mine through Turbotax. I have two w-2's for me, one for my wife, 1099's from two organizations and the first full year of my mortgage. I spend most of my work days filing taxes for clients so it doesn't bother me any, just time consuming.

 

[TheChanClan]

Not anxious, but not excited for it either. We sold a home and will have some capital gains tax to pay. We also have stock earnings that will be taxed. Thanks to the tax laws that limit deductions, we can't deduct all of our property taxes/mortgage interest, and with living in CA, it's a lot.

The whole process is kinda like a game. Until we owe a lot, then the game isn't fun anymore.

 

[longboard55]

Its pretty easy to do on your own with any computer program. Stocks can be complicated but most programs will do that automatically if you buy the right program. The key is to make sure any document you receive that is tax related is recorded exactly like it says. It is all a big computer system. I have spoken with IRS people, they are totally overwhelmed and way understaffed. No one is going to look at your return, it is just what the computer says

 

[Judique]

Very simple taxes here, no missing forms and no anxiety. Mine are already done and filed.

So are mine! I have to send the Feds $33, but Maryland is sending me back 95% of what was collected. Hope I get it by trip time in March and I might be a more generous Grandma, haha!

 

[lynxstch]

So are mine! I have to send the Feds $33, but Maryland is sending me back 95% of what was collected. Hope I get it by trip time in March and I might be a more generous Grandma, haha!

Just SS here, and MD doesn't tax it, so 0 paid, 0 back. Works for me, lol

 

[Judique]

Just SS here, and MD doesn't tax it, so 0 paid, 0 back. Works for me, lol

Maryland really works for us retired people. 2 Pension exclusions and no SS tax. Love it!

 

[tony67]

Luckily there are only 9 states left that still tax Social Security.

Taxes are not that difficult to do in most cases, and most of the companies that do it for you hire temps and use the same software you can buy in the store.

I did taxes for several family members as well and once it got too complicated I told them to get an accountant to do it, not one of the services. That worked out well for them and finally got me off the hook of doing it every year for them.

Still its very stressful and there are always concerns and I seem to always owe.
Of course the family members that live off the taxes I pay seem to somehow get a refund every year and go on trips.

In the end I'd rather owe than get a "refund" though.
I don't like the idea of giving an interest free loan and assuming they will pay it back.

 

[china mom]

Maryland really works for us retired people. 2 Pension exclusions and no SS tax. Love it!

.

 

[aprilgail]

I don't have anxiety- I know I will owe again this year even though I had extra 100 a month taken out of my pension checks and extra 50 a week taken out of my part time job check- I also drive for uber eats in my spare time or when I am bored so those thousands of dollars are all not taxed when earned- have to pay tax on it when I do my taxes.

 

[soccerdad72]

I forgot that I have a few more forms to pull down this year - a 1099 for my reffing income and forms for my online sports betting this past year.

I also do help 5 or 6 people with their taxes as well, including my sister and BIL, my boys (although I just walk them through theirs so they can learn to do their own) and a friend or two. Most of those are pretty simple returns, so it's just a matter of getting their documents and finding a site that I can do their returns for free.

 

[gmi3804]

Not anxious, but not excited for it either. We sold a home and will have some capital gains tax to pay. We also have stock earnings that will be taxed. Thanks to the tax laws that limit deductions, we can't deduct all of our property taxes/mortgage interest, and with living in CA, it's a lot.

The whole process is kinda like a game. Until we owe a lot, then the game isn't fun anymore.

I’ve always said better to owe taxes than not. Not that that makes paying taxes any more pleasant. But yeah, the mortgage and property tax deduction limits suck. Before we sold our house a couple of years ago, we could only deduct $10,000 of our $42,000 tax bill.

 

[robinb]

My DH does our taxes. We are never surprised since he checks things regularly because sometimes we need to make quarterly payments. He retires mid-year and we start living off our savings, so things will be different with less income.

 

[TheChanClan]

I’ve always said better to owe taxes than not. Not that that makes paying taxes any more pleasant. But yeah, the mortgage and property tax deduction limits suck. Before we sold our house a couple of years ago, we could only deduct $10,000 of our $42,000 tax bill.

100% agree with you. Otherwise the government is getting a free loan.
The $10,000 limit is a joke.