I used turbo tax for the first time ever this year as TaxAct (pointed to there by IRS as a free filing option) was a bit confusing when things get complicated in recent years.
I picked the correct category for our income and situation, but still got whacked part way in for an upcharge for some IRA movements.
I thought we were going to get nailed for taxes this year, but my wife smartly jacked up the withholding on the W-4. She retired in April of '23, and I have been retired since 2018 but deferred collecting SS until July '23. She started collecting in May. Got refunded a good but not excessive amount State (MA) and Fed, our effective tax rate was 2.1 percent.
One surprising adjustment was the
Savers Credit. I was floored that you could get a bottom-line tax credit for just making tax deferred 401K employee contributions! Never seen this as we have been phased out of this deduction in the past years due to income threshold, but got 20% of $2000(capped) off the bottom line this year. 400 bucks. I'll take it.
Since we will be living on almost 100% SS benefit income in 2024, I anticipate that there will be
no tax burden due to the over $31K
Standard Deduction for Married filing jointly couples over 65. I used the free AARP tax calc for a simulation what if.
I don't want to waste a big Standard Deduction "gimmie", we can withdrawal up to $17,000 of Rollover IRA untaxed savings money tax free. Alternatively, you could perform a partial Roth conversion of this same amount free from tax. Important to get monies out of the tax bucket and monies where the
Min Required Distribution will have a big tax impact when you hit your early 70's - we will be forced to withdrawal well over $75k annually - money that I likely won't need - and is of course considered income as it is in the pre-tax money bucket.
Below is a link to a free Fed Income
Tax Calculator/estimator that is great for doing what-if scenarios of Tax burdens on moving money,
Roth conversions and IRA withdrawals. It's quick and easy, just be aware, some entries are "hidden" notice the down arrows (caret) to expand fields.
Use this calculator to estimate your total taxes as well as your tax refund or the amount you will owe in taxes.
www.aarp.org