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Doing my 2020 taxes

reible

Have them submitted but not yet approved. Thought it best to get a head start since I had not done any preliminary estimates. I went from owing money last year to a refund this year. Very modest refund but none the less better then having to pay in.

I also figured that maybe just maybe if you get more funds being given out that they would send it to my bank like they did the first time..... last time I had to wait for a check to come in the mail.

So how did I mange this refund? Mostly due to my investments not do so well. Down a whooping 22%. At least I didn't have to pay as much in taxes but the off set is not very close to making it worth while. No sign that things will be better this coming year, in fact signs are that they will be much worse. I normally get 10 to 12 percent of my income from investments. This past year it was less then 8% and it could well be below 5% this coming year. Getting closer to start stuffing the mattress or just spending it on tools........

BTW it isn't all that bad, we are talking thousands of dollars not 10's of thousands. No reason to panic my money should out live me.

Ed

jsburger

We are just about ready to give our info to our CPA. Usually we get a Federal refund and owe the state. That is because Utah does not require withholding on my military retirement so I don't. The last two years we have not had any large tax deductabe expenses on our rental properties in California so we had to pay Federal and state. Last year was different so we are hoping to break even this year. Finally it looks like the Utah State Legislature may pass an exemption on military retirement income so that will help.

As far as investments, ours are holding very steady at about 10%. I am like you. What we have will out last both of us. The only time we take money out is for big expenses like the $14,000 dollars for the roof on one of the California rental properties. We don't need money from the "retirement accounts" for day to day living.

dusty

DONE and Pleased

garys

Done here too and no surprises since nothing major changed since last year. However, with changes in Washington, I expect things to be different next year when tax time rolls around. Only time will tell what they decide to do next year.

Ed in Tampa

Mine is done and I get money back! 😝 Last year had to pay, bummer! 😩

Ed in Tampa

Got my money already! That was super fast!

Gene Howe

Done and refund spent.

sehast

I submitted mine electronically and got the refund deposited to my bank account in 6 days time.

jsburger

Mine was submitted electronically on 22 Feb. I owe the state but got way more than enough federal refund to pay the state. Looks like what you guys are reporting that we may get are refund next week. :D

dusty

Based on information that I have available to me today, I have just completed my 2021 Income Taxes and I don't even have IRS acceptance of my 2020 tax return yet. They cashed my check though.

Why now you ask? That is a good question. I have an answer though it may not be a good one.

I am attempting to change an old habit. I have always had my tax withholding set so that I owed a small amount each year. Next year and from then on I want to get a refund instead. I am getting ready to alter my withholding to accomplish this. I think I have the numbers; just wish I didn't have to wait a year to validate them.

jsburger

dusty wrote Based on information that I have available to me today, I have just completed my 2021 Income Taxes and I don't even have IRS acceptance of my 2020 tax return yet. They cashed my check though.

Why now you ask? That is a good question. I have an answer though it may not be a good one.

I am attempting to change an old habit. I have always had my tax withholding set so that I owed a small amount each year. Next year and from then on I want to get a refund instead. I am getting ready to alter my withholding to accomplish this. I think I have the numbers; just wish I didn't have to wait a year to validate them.

That should be 2019 and 2020 but no matter. I assume you file electronically yourself. I don't know how that works. Can you do it directly with the IRS or do you have to use a third party online service? I have had the same in person CPA for over 25 years that files mine. This year the day he filed them electronically he sent me an email that said Federal, Utah and California tax forms were all accepted. I don't get anything directly form any of them.

dusty

No. It says what I meant. I have completed (not filed) my 2021 taxes. I have done a forecast, based on all that I know about my financials and I have completed my 2021 taxes (for the reason stated). The Government (the IRS) has my 2020 filing. I know that ONLY because they have cashed my check. I guess they've been too busy pushing out direct deposits to do the others. :( :(

Ed in Tampa

Dusty wisdom tells us it is better to owe than to get money back. Money back might appear to be free money but in fact it is money that the government has held for a year without playing you anything for it. Best would be a zero return where you do not owe nor get anything back.

There are exceptions of course if you owe too much a few years in a row they charge you penalties, so be careful.

Best would be tell the bums in Washington to get real jobs and not pay taxes at all.

dusty

Ed in Tampa wrote Dusty wisdom tells us it is better to owe than to get money back. Money back might appear to be free money but in fact it is money that the government has held for a year without playing you anything for it. Best would be a zero return where you do not owe nor get anything back.

There are exceptions of course if you owe too much a few years in a row they charge you penalties, so be careful.

Best would be tell the bums in Washington to get real jobs and not pay taxes at all.

I agree in principle, Ed but we must acknowledge that the bums in Washington are there because we put them there.

History shows that once there they are likely to remain there for their remaining life time.

My Grandmother would tell me "You made that bed now you must sleep in it". I don't sleep well these nights.

My objective now is to get as close as I can to "balanced books" at the end of each remaining tax season. If I can't get to "balanced books", I want them to send me a check rather than me sending them one.

sehast

You don't have to change tax withholdings from SS and pensions if you want to increase your tax paid for the current year. You can make a tax payment any time during the year but typically it is usually done for each quarter. The IRS has submittal slips for this purpose. So you can decide how much more you want to pay and submit a check for it with one of the quarterly slips. Then make sure you take credit for the additional payment when you file taxes the following year because I don't think you will get a 1099 for the additional payment.

dusty

sehast wrote You don't have to change tax withholdings from SS and pensions if you want to increase your tax paid for the current year. You can make a tax payment any time during the year but typically it is usually done for each quarter. The IRS has submittal slips for this purpose. So you can decide how much more you want to pay and submit a check for it with one of the quarterly slips. Then make sure you take credit for the additional payment when you file taxes the following year because I don't think you will get a 1099 for the additional payment.

This is good to know.

I was aware of "quarterly payments" but was not aware that they were for this purpose. I thought they were to pay back taxes.

I have already made changes to with holdings but I know that the new amounts will be inadequate. The information that you have provided will now be utilized late in the year.

https://www.irs.gov/forms-pubs/about-form-1040-v

Thank you for the feed back.

Old Dogs do learn New Tricks.

reible

I like to look at it this way. I'm getting back say $144 so lets just keep it simple if I had the whole $144 and invested it at the beginning of the year how much interest money would I get at the current interest rate. Keep in mind interest rates change and in this example I will use .50% since that is about what the market is right now. Now what would I do with that $.72???? Not much.

OK lets say that you average the amount over the 12 months and then use compound interest. That would be $12 each month deposited at the end of each month. That sounds better right? So now I have to figure out what to do with $.33.

Reality says one thing but numbers they sometimes bring reality into real world focus.

Ed

Edited to fix decimal point placement

JPG

$144 x .005 = $.072

jsburger

JPG wrote $144 x .005 = $.072

Do banks round down? The FED does. :D

dusty

Statistically the FED breaks even by using their rounding procedure. The question though is do they round every number or only the final results?

Example: Add a number of different sources of income and then round .... or .... round each and every income item and then add.