Income Taxes

Beth Gallagher

Beth Gallagher

Well-known member
Has anyone filed yet? We are still waiting on a couple of forms; my husband is getting antsy. :D. I'm curious about the new deductions from the "Big Beautiful Bill" and whether anyone is seeing any real difference from that.
 
My taxes will take about 10 minutes and I probably have what I need, but I just can't get in the mood to do them. Since I usually owe them $$, I wait until mid April, file for an extension, and actually pay the balance in October. Maybe I should take a look at them now anyhow to see if the changes did much for me. I dunno.
 
Krystal Shay said:
My husband filed ours a couple days ago. In the big beautiful bill, If you are over 65, you get an additional 6 thousand dollars you can deduct per person, if you don't itemize.
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Are there income restrictions on that, Krys? Seems like I read that but I can't recall. Guess I'll go look it up. :D
 
As I posted elsewhere, we filed and got our refund in 4 days! I don't think there is any restriction on the $6000 deduction. It is a reward for getting old:)
 
I found this info...

"For the 2026 tax year, seniors (65+) can claim a new, additional $6,000 deduction ($12,000 for married couples filing jointly) if their Modified Adjusted Gross Income (MAGI) is under $75,000 for singles or $150,000 for joint filers. The deduction phases out completely at $175,000 for singles and $250,000 for joint filers. Deduction is available for both itemizing and non-itemizing taxpayers."
 
Yeah, it doesn't take that much for a lot of people to lose out on part or all of that old folks $6K additional deduction.

It can be whittled down due to almost anything, such as SS finally kicking in or taking a distribution from deferred compensation (457, 401(k)) and IRAs. Basically, the better you've managed your retirement the less good it does for you. Single people, as always, really get screwed.

Retirement taxes are not simple. You need to navigate a lot of things like the Social Security Tax Torpedo and the Medicare IRMAA Cliffs. Selling real estate can be a killer on taxes too.
 
Jacob Petersheim said:
Yeah, it doesn't take that much for a lot of people to lose out on part or all of that old folks $6K additional deduction.

It can be whittled down due to almost anything, such as SS finally kicking in or taking a distribution from deferred compensation (457, 401(k)) and IRAs. Basically, the better you've managed your retirement the less good it does for you. Single people, as always, really get screwed.

Retirement taxes are not simple. You need to navigate a lot of things like the Social Security Tax Torpedo and the Medicare IRMAA Cliffs. Selling real estate can be a killer on taxes too.
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I got bit by a rollover a couple of years ago. My Medicare premium went WAY up for an entire year after that distribution. I hadn't even considered that, but they have so many ways to get you.
 
Beth Gallagher said:
I found this info...

"For the 2026 tax year, seniors (65+) can claim a new, additional $6,000 deduction ($12,000 for married couples filing jointly) if their Modified Adjusted Gross Income (MAGI) is under $75,000 for singles or $150,000 for joint filers. The deduction phases out completely at $175,000 for singles and $250,000 for joint filers. Deduction is available for both itemizing and non-itemizing taxpayers."
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That is for next year, but it appears I was wrong. Sorry.
 
No state taxes here in Florida, thank goodness. I have everything I need for the fed except for the will to do it....lol.

The Other Half was stymied on one point today on his return. I found the problem but of course I must.be.wrong because, well, you know.

There was a final grudging admission that I was right. I wanted a formal admission and, hopefully, a ticker-tape parade, but I settled for a grunt of, OK, you were right..."

I have to take my victories when I can.
 
Jacob Petersheim said:
Started mine and came to a stop. Grr, I owe a bit over $2000 between Federal and State.

That's what happens when you draw on that deferred account.

I guess I'll be slow-walking it now until April rolls around. 😜
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My 401(k) provider withholds 25% of the amount for the Fed and 4% for State. I did not try to opt out, although there may be a way to do so. I guess I lost the Time Value on the withholding.
 
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We use an investment firm and they take care of juggling investments for tax purposes. They usually contact us in November of each year to discuss moving funds between taxable and tax-paid accounts so that we don't get bit, as well as managing withdrawals. I think we have 25% income tax deducted from SS payments, too.

It gripes me that we have to be punished for being responsible and saving for retirement.

In other news, our stock market holdings are soaring for the past couple of weeks, so woohoo.
 
Jacob Petersheim said:
Mine did the same. I still owe more taxes than I'd roughly estimated earlier though. It depends on what bracket you get pushed into.
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So if you could rewind the clock and do a What If on paying the taxes for a Roth conversion, would it have been worth it? The obvious issue is that the the money you used to pay the Conversion Tax could have been invested, so you lose decades of compounded gain merely to avoid future taxes valued at Future Dollars. How much of an NPV spread can it really get to be? (I guess it also depends on the length of time between the conversion and the withdrawal.)
 
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