Is anyone using TurboTax or other tax software to estimate taxes and help reduce taxes for the current year?
Now that I am retired, this has been quite value for me in keeping me below the 24% tax rate ( I can estimate my total income within a couple of thousand bucks) and not hit the next IRMAA level. This has been especially valuable in minimizing state taxes (GA), as SS is not taxable and Pension income and IRA distributions are not taxable up to 65K per person. Playing around with the amount of IRA distributions between me and my DM in TurboTax has allowed me to eliminate my state income tax. If I had not done this I would have paid much more in state tax, because I probaly would have just taken the IRA distribution out of my account only. I realize this is state by state where some income is taxed.
Also, this allows me to estimate the total amount of federal income tax I will owe and have it taken out of my IRA distributions so I don't have to worry about estimated taxes or SS fed tax withholding. I have done this for 2 years now and it comes out pretty close. Of course some things change from year to year ( like tax brackets, standard deduction, etc).
Are people doing other things like this that I am missing?
Now that I am retired, this has been quite value for me in keeping me below the 24% tax rate ( I can estimate my total income within a couple of thousand bucks) and not hit the next IRMAA level. This has been especially valuable in minimizing state taxes (GA), as SS is not taxable and Pension income and IRA distributions are not taxable up to 65K per person. Playing around with the amount of IRA distributions between me and my DM in TurboTax has allowed me to eliminate my state income tax. If I had not done this I would have paid much more in state tax, because I probaly would have just taken the IRA distribution out of my account only. I realize this is state by state where some income is taxed.
Also, this allows me to estimate the total amount of federal income tax I will owe and have it taken out of my IRA distributions so I don't have to worry about estimated taxes or SS fed tax withholding. I have done this for 2 years now and it comes out pretty close. Of course some things change from year to year ( like tax brackets, standard deduction, etc).
Are people doing other things like this that I am missing?
Statistics: Posted by trueson1 — Thu Jan 04, 2024 2:00 pm — Replies 4 — Views 143