Out of Steam
Thinks s/he gets paid by the post
- Joined
- Mar 14, 2017
- Messages
- 1,669
I've completed our tax returns in the past few days, and for the second year in a row, my wife and I are receiving the largest total tax refund we've ever gotten. We overpaid Federal taxes by about 40%. I understand the smaller Virginia overpayment is a one-time issue of an increase in the standard deduction that we can adjust withholding for.
Our overall Federal tax rate is quite close to 10%, with money withheld from my pension and our IRAs of about that amount. But we're taking in substantial income from 401(k) and TIAA accounts with mandatory 20% withholding, and there was no obvious means of reducing withholding from other accounts to make up for it.
My wife was somewhat overwithheld on a part-time job, but that was only 25% of the overpayment. She will start Social Security during the year, and we won't have taxes withheld at least until 2024.
Is the only answer is periodically transferring money to IRAs and drawing monthly payments from those exclusively?
Honestly, this looks like a setup for a large-scale annual loan from seniors to the Feds.
Our overall Federal tax rate is quite close to 10%, with money withheld from my pension and our IRAs of about that amount. But we're taking in substantial income from 401(k) and TIAA accounts with mandatory 20% withholding, and there was no obvious means of reducing withholding from other accounts to make up for it.
My wife was somewhat overwithheld on a part-time job, but that was only 25% of the overpayment. She will start Social Security during the year, and we won't have taxes withheld at least until 2024.
Is the only answer is periodically transferring money to IRAs and drawing monthly payments from those exclusively?
Honestly, this looks like a setup for a large-scale annual loan from seniors to the Feds.