Taxes....refund or owe?

[hesperus]

Ours was out of wack this year. We are getting back around $8k from federal. Whoops. Now, this did include a $2k credit from a heat pump we had installed, but it still would have been way off. We adjusted our withholdings for this year. We'll see if things are a little more normal next time.

State we owed a couple hundred, as or usual.

That happens more than people admit.
An $8k refund usually means withholding was too high, credits just amplify it.
Adjusting now is the right move so the money stays in your paycheck.
Owing a few hundred to the state is pretty normal.

 

[TickTock]

Still crunching the numbers. Seems likely that we will owe the feds a few hundred dollars and will have a state refund (due to my misunderstanding of how retirement income is taxed).

My income tax philosophy is 1. Set it up so there are no penalties, and 2. After #1 is met, try to come as close to $0 as possible.

 

[Sunset]

Given the crooks who will file a fake return to get your refund, I like to owe a few dollars.

The Crooks still get big refund using your return, they just claim the 2 new children and the tax credits for other various things done to "your home" , plus the IRA contributions made.

Doesn't matter if you underpaid taxes, they get a refund.

 

[JohnDoe]

This is the closest we been in a while.

Owe 900 fed and 200 state.

 

[old medic]

Owed big time due to 1st Roth conversions but planned on it.

 

[frayne]

Usually owe, which is not a big deal. After doing taxes at Block and VITA for seven years, most of the fraud I saw was people, usually ex-spouses or family members claiming someone else's dependents for the EITC benefit.

 

[Sorcerer]

Received our federal return. Took around 2 weeks.

 

[BruinBones]

Had pension and >$120k in side gig income in 2024 and owed over $8000.
Side gigs yielded only $30k and withheld more in pension in 2025, so will be getting ~$3300 refund this time.

 

[calmloki]

Just an informed guess, but after paying quarterlies i'm pretty sure we'll Oma'gawd.

 

[1242Vintage]

We will be paying.

I had a part-time gig managing a construction materials testing lab. Nearly all of my income from that job went to tax withholdings.

I stopped that job mid-year. Will have a substantial tax bill coming my way.

Still waiting on my Merrill Lynch statement and one other. Once those come will be able to complete tax filings.

 

[treeofpain]

Our goal is break even. We will get a refund of about $200.

 

[Plantman]

I plan to never owe.

 

[5Miler]

DGF getting $4200 refund and I'm getting $4900 refund.

DGF pulled $50K from her IRA with mandatory 20% withholding on top of her withholder from her SS which was way too much. I wasn't aware of her SS withholding until the end of the year. She has decided to keep it in place for this year. Then the extra $6K exemption piled on top.

Mine was complicated as I closed out a small non-qualified annuity stemming from a whole life policy I started 50 years ago. I couldn't get a straight answer on my tax liability so had to err on the conservative side having some money withheld on top of my normal withholding on my SS. Then the $6K exemption from the BBB also piled on top. Closed out the annuity as I start RMDs in 2026 and needed to streamline my income sources before that started. The annuity was just big enough to be a nuisance. The real difference was the drop in the amount of my SS that was subject to taxes due to all of the above.

I would have liked to have accomplished some more Roth conversions in 2025 but didn't due to the uncertainty of my tax bill and the fact I was out of the country pretty consistently the last quarter of the year. I was just too busy vacationing to deal with it.

We don't pay Georgia state tax due to generous retirement benefits in the state.

 

[SnowballCamper]

This year is very sub-optimal with a refund over 2k. It's annoying that the American Opportunity Education Credit basically undoes the tax free growth from the 529 plan distribution. Turns out I'm ahead by paying the tax on the growth part of the distribution (even thought it is used for qualifying expenses) and claiming the credit. First world problems....are annoying sometimes.

 

[yakers]

Owe $3K Fed, due $500 state, looking good to me.

 

[RetiredHappy]

Owed $545. Usually we get back about $1K but I forgot to account for NIIT when I did tax withholding calculation before end of the year. Paid using credit card and we are so glad to be done for the year.

 

[Flieger]

Mine is weird for 2025. Fed looks like owing $2550, while State looks like refund of $2575. This is all from my calculation and I haven't received every form yet from Fidelity, so likely will be very close to even-steven once all is said and done.

Flieger

 

[ShokWaveRider]

Owe, just as planned.

 

[Flieger]

Anyone seen this? Not sure what TT Do it Yourself Premium means....

Flieger

 

[The Cosmic Avenger]

While we were working, our (small) Federal refund usually came close (within $1K) of balancing our state tax owed. But after retiring last year, and funding our DAF with a big chunk of stock that was over 90% gains, we're getting back about $14K from Federal and $2K from the state. And this year's taxes are hard to predict, since my spouse is getting their severance paid all in 2026, but it's our first year where W-2 income is not a majority of our income.

To compensate, I increased the withholding on my (pre-SECURE Act) inherited IRA distributions for this year, I feel like that's easier than quarterly payments. I may switch in the next couple of years, after I get a handle on it.

 

[iloveyoga]

I came out almost even between state and federal. For 2026 I should not have to file an Iowa state return, so that will be nice. All done and my state refund is in the bank. I got my Mom's taxes all e filed the other day.

 

[aja8888]

Will not know until I get my K-1's in mid March...

 

[AudiDudi]

Will not know until I get my K-1's in mid March...

I was so happy to get rid of all the K-1 form issuers many years ago.

 

[Diogenes]

As our former long term CPA would tell me before he passed, "would you rather make less money so you pay less taxes?".

I resemble that remark!

Let's unpack the psychology, lest the whimsy be sourced strictly from presumptive foolishness. We pay taxes on dividends or transactions from our portfolios. Those taxes are due, from the growth... and not from our spending, withdrawals or earned income. If we don't draw from our portfolios, we are effectively paying taxes on money to which we're insensate. It might as well be thousands of pounds of gold trapped in an asteroid orbiting 20 million miles away.

And if a person is working part-time, then every dollar earned pushes out of the 0% tax-bracket the taxable dividends. Plus FICA... both sides, if you're self-employed.

Every year, I raise my quarterly estimated tax payments to the IRS. Every year, the following spring I end up owing more... all while supposedly the US stock market's overall dividend payout rate is dwindling (so we hear). Isn't it wonderful?

 

[ncbill]

Yes