Estimating My Income Tax for This Year

[Talent312]

I should at this moment be patching the drywall in my laundry room, but I thought that looking at where I stand on income taxes for the year would be more fun. I know there are software and online programs that will do this for you, but I wanted to try it "by hand."

I easily found totals for my sources of income, but determining the taxable amount of social security a real P-I-A. I used the IRS worksheet and all I can say about it is, "Damn it all to hell! I don't work for NASA." About the best digest I found was this:

For someone an AGI that's MT $44K... Add 1/2 of your SS to other income for a "taxable sum," then for the amount that's between $32-44K, enter $6,000 (50% of the $32-$44K tier) and add 85% of the amount over $44K... or 85% of total SS, if less. That seems to agree with the worksheet.

I added the taxable amount of SS to my other income and deducted my standard personal deduction to find my net taxable amount by. Then I used the tax table to find my liability and deducted 12-months of withholding.

Bottom Line: I'll owe $709. But I'll let the software double-check my numbers.

Now that's done, I'll have to work on the laundry room.

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[VacationForever]

We make it simple and use 85% of SS as taxable.

 

[Luanne]

We're planning on having our accountant work up our taxes both taking deductions and with the standard deduction as I have no idea which will work out better for us this year.

 

[Talent312]

With a standard deduction of $24,000 for MC-Jointly (add'l for over 65), itemizing will not be an issue for us.

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[Luanne]

With a standard deduction of $24,000 for MC-Jointly (add'l for over 65), itemizing will not be an issue for us.

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Probably not for us either, but we will still most likely have it figured both ways, this year at least. Or, we could get to the accountant and based on previous years' filings he may be able to tell us what will benefit us the most.

 

[WinniWoman]

Tax software will automatically calculate it for you both ways when you do your taxes.

 

[Luanne]

Tax software will automatically calculate it for you both ways when you do your taxes.

We don't do our own taxes.

 

[MOXJO7282]

i've used Turbo-Tax for years. So absolutely easy to use even with my TS income, other real estate taxes and regular income. Anyone who is paying an account please consider using Turbo-tax. It is so intuitive to use. Now it's really a good value because I can do my kids using the same software so it becomes extremely cheap.

 

[TravelTime]

We will be giving away about half of our hard earn income as usual so prefer not to look at the numbers.

 

[Talent312]

I enjoyed designing my own little spreadsheet to estimate my tax liability.
-- but of course, I'll use software after the 1099's roll in --

I also like playing with a spreadsheet I use to project cash-flow 3 months out.
Like I'll suddenly find extra $$ somewhere. At least it keeps me off the streets.
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[clifffaith]

i've used Turbo-Tax for years. So absolutely easy to use even with my TS income, other real estate taxes and regular income. Anyone who is paying an account please consider using Turbo-tax. It is so intuitive to use. Now it's really a good value because I can do my kids using the same software so it becomes extremely cheap.

My father has used TurboTax for years. Wouldn't hear of seeing our accountant the year my brother's estate (about $100K) needed to be factored in. Then he got a bill indicating he owed $9K more, plus penalties. (I think the issue was the outstanding student loan balance that was forgiven at death). And Dad really didn't want to deal with it at all because my brother was a suicide. But for $9K I insisted he get some help at that point and he owed nothing extra.

 

[Fredflintstone]

I gotta respect you eager beavers! I put my head in the sand until April and pray hard not to pay anymore. Kind of like knowing the hammer is going to fall but ignoring how hard its going to hit


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[Talent312]

I put my head in the sand until April and pray hard not to pay anymore. Kind of like knowing the hammer is going to fall but ignoring how hard its going to hit.

There's value in not-knowing, or not wanting to know.
That way, you won't spend months stewing about it... as I might.
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[VacationForever]

We paid 0 in taxes for last year's returns, this year's will be an expensive one and 2019's returns will drop back to very low due to our lack of income. Maybe I should go back to work so that we can afford to pay more taxes.

 

[WinniWoman]

i've used Turbo-Tax for years. So absolutely easy to use even with my TS income, other real estate taxes and regular income. Anyone who is paying an account please consider using Turbo-tax. It is so intuitive to use. Now it's really a good value because I can do my kids using the same software so it becomes extremely cheap.

Or TAX ACT, which I use- the online version. I also so my son's for him. Although I am thinking soon he should really be dealing with it himself as he is 30 years old! His is free because there is no state income tax where he lives and he has an extremely simple return.

 

[WinniWoman]

There's value in not-knowing, or not wanting to know.
That way, you won't spend months stewing about it... as I might.
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People who are oblivious are the happiest! I prefer to wait until I do my returns. It's not like I expect to be getting back thousands of dollars! LOL!

 

[bogey21]

i've used Turbo-Tax for years. So absolutely easy to use even with my TS income, other real estate taxes and regular income. Anyone who is paying an account please consider using Turbo-tax. It is so intuitive to use. Now it's really a good value because I can do my kids using the same software so it becomes extremely cheap.

I've used Turbo Tax for almost 20 years now. It has easily handled a business, rental properties, security transactions, etc. in addition to filing simplicity another big benefit is that is carries things forward from year to year, personal information, depreciation, excess security losses, etc. IMO it is simple to use and well worth its cost...

George

 

[rapmarks]

I've used Turbo Tax for almost 20 years now. It has easily handled a business, rental properties, security transactions, etc. in addition to filing simplicity another big benefit is that is carries things forward from year to year, personal information, depreciation, excess security losses, etc. IMO it is simple to use and well worth its cost...

George

I agree. I don’t understand why so many hire an accountant with a simple return. I did for several years and he never found me any extra deductions now you can import your entire broker statement so it is so helpful

 

[CalGalTraveler]

Our accountant has saved us thousands but our return is complicated because we are not yet retired

When he ran our taxes this year his software also gave a projection for next year with tax reform. Despite losing thousands of deduction due to SALT deduction cap we will owe only about $300 more.

Looking into adding home office deduction for our business to enable more write off of property taxes.

 

[Luanne]

One reason we continue to use an accountant is that if there are any screw ups, he is responsible.

 

[Passepartout]

If it was just me, I'd hire my long time accountant/tax preparer. But having a lawyer for a wife who considers herself highly qualified and takes it a personal affront to suggest someone else perform 'professional services', I defer to the boss. (this year [17], she also paid the extra tax and penalty for her math error )

Jim

 

[CalGalTraveler]

Another advantage of an accountant is that they represent you in audits. S/he can say, "I dont have the info readily available for that question and will need to check with my client."

This avoids you saying too much and creating more issues, and buys more time to think about how to respond appropriately.

He also knows items that cause audit flags and helps to avoid them.

 

[controller1]

I've used TurboTax for over 20 years and wouldn't think about using anything else for my personal taxes. AND I'm a CPA.

@clifffaith it sounds as if your father is so familiar with TurboTax that he uses the "form" method instead of the questionnaire. If he used the questionnaire method, he would have been asked if there had been any forgiveness of loans.

@CalGalTraveler (FYI only) a home office deduction is an IRS red flag for audits. One must use the office on a regular and exclusive basis for the business and very rarely does someone use the office exclusively for their business.

Disclaimer: The above should not be considered tax advice and one should consult their own tax advisor on any and all issues.

 

[CalGalTraveler]

@CalGalTraveler (FYI only) a home office deduction is an IRS red flag for audits. One must use the office on a regular and exclusive basis for the business and very rarely does someone use the office exclusively for their business.

Disclaimer: The above should not be considered tax advice and one should consult their own tax advisor on any and all issues.

LoL, that is what my CPA said too! Although we maintain an office space I use my home office or visit clients. I rarely go to the office. All of our sensitive records are stored in my home office because we have a shared office space and we want to keep records confidential.

 

[VacationForever]

We had always used a CPA until this year for last year's return. This year we used Turbo Tax and bought the Audit representation as well as CPA consultation options. We did have a good conversation with the Turbo Tax CPA and it was well worth the extra cost.

After we retired, and as our income is pretty straightforward, we have no more need for a CPA to do our taxes.