quote:

Originally posted by StorminNormin:

Or are you speaking more about someone reviewing the tax return for this year instead of me using TurboTax?

Sorry for the delay in getting back to you. Called it an early night after posting.

If there's a CPA you, or somebody you trust, has experience with that would be a good place to start.

My personal recommendation is to use an Enrolled Agent at H&R Block to do the return this year and get their accuracy guarantee. I worked at a local Block office doing tax preparation for a number of years so that's what I know, and I wouldn't recommend them if they weren't good at what they do.

Block offers a accuracy guarantee that if you get a letter from the IRS and the cause is a mistake on Block's part, Block will cover the cost of any fines. They use to call it Peace of Mind guarantee but I've been away from the field for a while so I don't know if anything has changed, but it's worth asking about.

The Block franchise I use to work at was open all year, mainly to handle our clients that were corporations, self-employed, farms, etc., - as well as any letters/issues our clients were having with the IRS. Although a Block corporate office will provide the same work/benefit, it's more likely you'll be able to get some discounting on price with a franchise because they are allowed a lot of leeway in their pricing structure whereas a Block corporate location has none.

Hope this helps!

Edit to add: The franchise I worked at also had a policy that anyone who had their return done by someone else (self, Jackson-Hewitt, CPA, etc.) could come in and we would review their previously filed returns (multiple years if desired) for free. If everything was good and correct it was a handshake and they were on their way. If there were any issues (more tax owed, additional refund due, miscategorization, etc.) we would inform the client and discuss solutions and cost. While we could and would do the work to fix the return there was no obligation for the client to use us to do so, and we would tell them so.

The caveat is that this is a service we would provide after the current season is over because the priority is taking care of the paying clients before the deadline.

Not sure if this is possible at your job, but what I do is have the IRS take an extra $50 per week from my check. It has worked as I got a nice refund last year and I plan to continue doing this.

I also max my 401K and when it gets to the point of being matched by my employer, I switch it to my ROTH to take the rest for the year.

Not to the same extent, but I ran into something similar when I retired from the military and got a regular job. It seems the biggest problem is that when you pick a number of dependents for withholding it treats it as if that were your only source of income. In my case, single zero for both retired pay and my job were not enough withholding because it put me into the next tax bracket when combined. Mine was not as big of a hit, I think it was a couple thousand dollars in taxes that I owed. I ended up having to have additional withholding from my retired pay to make up the difference once I figured out roughly what it was gonna be. But in your situation, it definitely couldn’t hurt to have someone else to take a look.

You still don’t “get” the graduated tax system. People keep telling you the facts and you keep repeating “it’s not that, it’s because I hit the 32% bracket”

It’s not the bracket. It’s your withholding. It isn’t enough. After 24% it’s goes up 8% to 32%. Like it has been said, only the amount over the threshold gets the higher percentage. So the worst possible case is that you were right at the threshold and her pension went entirely into the next bracket.

Do the math. If you were withholding correctly prior to this event the ABSOLUTE MOST you would be under withholding and hence owe is the 8% difference. That’s it. So if everything is absolutely correct and nothing else was off (which obviously isn’t the case) if you owe $21,000 for an 8% difference your wife is making north of a quarter million dollars in her pension. I’m going to go out on a limb and say she is in fact not making a quarter million. (8% of $250k is $20,000)

It’s more likely that being paid under a 1099 type form you haven’t withheld AT ALL.

Obviously this is a forum, you really should get a tax guy, a real one, at least once just to have them explain it to you. Public math and all so if anybody sees an obvious mistake on my part I will correct it but I believe I’ve got the gist of it correctly. It’s the withholding not the bracket.

This is the equivalent of we all know “that” guy who spouts off about not working any overtime because due to the tax brackets he works more and gets paid less. It was never true but it’s hard to explain how math works to people and people love to complain about taxes so you are fighting an uphill battle so you just nod your head and move on.

Not for nothing but my dad always said the best way to figure taxes was to write a check to the govt each year. Borrow THEIR money instead of loaning them yours all year.

I’m not trying to be mean here but getting a BIG refund each year and pretending like it’s some gift is not indicative of good financial sense. At all.

That big refund, with proper discipline, should be working for you and yours all year round instead of sitting in the govt lap.

The big refund each year people are making a mistake. Don’t be those people.

Big difference between it just feels good and it’s just smart.

quote:

Originally posted by StorminNormin:
She is 55 and I am 53 and in 2024 she became eligible to begin receiving her state pension while she now works a good private sector job. I still work for the state and have 9 years until I can pull a full pension.

Now, or this year soon after the chaos of getting this tax filing finished, is the time to talk to a good fee-only fiduciary financial advisor to get you configured for the next 10+ years.

Taxes in retirement are quite different than when working. You have several very key ages coming up (59.5, 62, 63, 65, 67). Each one provides a significant opportunity or trap, worth many thousands of dollars.

With pensions, 401k, Social Security, Medicare, other government retirement programs you may have, health care insurance needs prior to Medicare, etc, a sophisticated analysis could really be of benefit. Their computer will model different scenarios to show you various outcomes based on your goals. There are some triggers where $1 over the limit results in huge costs, or 1 day too soon or too late causes problems.

I have found that Turbo-Tax covers everything I need for filing taxes. However, the impactful stuff happens before that in the planning and execution of an overall plan. Thus you may not need to pay a professional tax preparer, so don't use the fear of jumping into an expensive annual tax preparation keep you from consulting with a financial planner. One visit now, maybe another visit in a few years to tweak things as needed.

Your ages are perfect right now to get this plan set up! 60 is too late. The day after you retire is too late.

quote:

Originally posted by pedropcola:
Not for nothing but my dad always said the best way to figure taxes was to write a check to the govt each year. Borrow THEIR money instead of loaning them yours all year.

Yes. I consider that I have planned properly if I have to write the largest check to the IRS possible without having to file and pay on form 2210, underpayment of estimates. Giving Uncle Sam an interest free loan is an explicit non-goal.

Yup. That’s what he said. It takes discipline and you don’t get the endorphin rush of “free” (not at all in reality) $$$$.

Most people love the idea of a tax refund. It’s an idiotic idea if you think about it critically. You didn’t find or get anything. You lost money on the deal. Straight fact.

Remember tbe history of the income tax in America.

First, then and now needed to finance bankers' wars, and the beginning of the end of our freedom and liberty.

We've had a CPA do our taxes for many years and we're happy with the results. But he's told us on numerous occasions that he prefers to deal with past history and not give out tax advice for future planning. He says a Certified Financial Planner (CFP) is the person we should be asking to answer the questions of how to reduce the amount of taxes we pay. We've invested wisely over the years and I'm retiring in a few months, so we're finally going to have our first no-obligation meeting with a CFP on Thursday to answer those "Okay, what now?" questions.

quote:

Originally posted by pedropcola:
Not for nothing but my dad always said the best way to figure taxes was to write a check to the govt each year. Borrow THEIR money instead of loaning them yours all year.

There's a nice loophole, fully legal, to do this. Normally the IRS wants taxes paid at the time the income is received. Either via withholding or by quarterly estimated tax payments. Otherwise it is late and is penalized.

So a taxable income event in January requires taxes be paid then.

But, withholding in December (or at any time during the year) erases the need to pay in January. That's the loophole.

Do a taxable event in December and withhold enough to cover all the taxes due for the year. e.g. withdraw enough from an IRA/401k in December to cover all taxes due, and do a 100% withholding. For someone still working, it could be a ROTH conversion in December.

Have one of you guys considered early retirement to get that income stream down?

Or, and just spitballing here, withhold an appropriate amount and this wouldn’t happen.

Using Vanquish’s method you could also consider moving all your funds to non interest bearing accounts and it will simplify your taxes immensely. lol.

Sorry VANQUISH but it was too easy. “I pay too much income tax”. VANQUISH, “quit working”.

I’m getting my pensions which are much smaller than your wife’s but i never had taxes withheld so I will be writing a big check. I will probably have some additional tax withheld from my day job to lower what I have to write next year.

Like others have stated, I make sure that I do nto get a refund. Most people see that as something good but are too stupid to understand that they are giving the govt an interest free loan since they are inept at saving.

This is the first year in many my wife and I are slated to get a refund. We asked the tax preparer to double check for errors as we ( DINKS-double income no kids) haven’t gotten a refund in decades! I did increase my 401K contribution to near max earlier this year, which may have helped.
I will brace for next year though, as I started collecting my military retired pay this month, and while not taxed at state level, is at federal.
I may this year even max out my 401K contributions to help offset.


Did anyone notice something happen in tax regulations that would result in a significant change ? Going from “ you owe us 11K” to your getting 7K back doesn’t make sense to me?

StorminNormin - you might want to ensure you run the numbers on Form 2210. The IRS certainly will.

quote:

Originally posted by captain127:
Did anyone notice something happen in tax regulations that would result in a significant change ? Going from “ you owe us 11K” to your getting 7K back doesn’t make sense to me?

One possible explanation is there was a change to make both tips and overtime pay tax free. (Well, to a point, and with some fine print...)

2025 withholding schedules and payroll software did not account for it, since it wasn't implemented until over halfway through the tax year.

So folks who worked OT and/or got tips in 2025 will likely end up with an unexpectedly large refund this tax season.

I use a financial advisor whose company also has a tax division. This helps me keep my income, investments and tax strategy closely aligned. (which is very important as you approach/enter retirement)

It doesn't hurt that my financial advisor also happens to be a gun-guy and a big game hunter.

"Then I enter her 1099-R for her pension"


I have my employer pay an extra $150 weekly to IRS, I make about $50-$70k a year in 1099 side income. It usually works out to owing a few hundred or getting a little back

I never want a refund. When my CPA tells me what I owe, I ask how much I can throw at retirement to knock the bill down and by how much that would knock it down. Then I write a check to my IRA. It's usually a pretty good ROI. But my (self-employed) income is too unpredictable to know in advance how much to contribute.