Doing my 2020 taxes

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jsburger
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Re: Doing my 2021 taxes

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dusty wrote: Fri Mar 19, 2021 12:49 pm 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.
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dusty
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Re: Doing my 2020 taxes

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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. :( :(
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Ed in Tampa
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Re: Doing my 2020 taxes

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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.
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dusty
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Re: Doing my 2020 taxes

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Ed in Tampa wrote: Sat Mar 20, 2021 9:58 am 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.
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sehast
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Re: Doing my 2020 taxes

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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.
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dusty
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Re: Doing my 2020 taxes

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sehast wrote: Sat Mar 20, 2021 11:37 am 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.
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reible
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Re: Doing my 2020 taxes

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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
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JPG
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Re: Doing my 2020 taxes

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$144 x .005 = $.072
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jsburger
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Re: Doing my 2020 taxes

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JPG wrote: Sat Mar 20, 2021 5:21 pm $144 x .005 = $.072
Do banks round down? The FED does. :D
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dusty
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Re: Doing my 2020 taxes

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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.
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