scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
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- 6,705
With 2013 just ending, I was reviewing my income tax projections because I have to make some estimated income tax payments to both the Feds and to my home state (NY). I have a spreadsheet I use as a skeleton version of my income tax forms so I can update it throughout the year and make estimated income tax payments prior to the 4th quarter.
I found two unusual things for 2013. One is how simple my 2013 income taxes will be for the first time in 25 years. In 2013, I made no redemptions of any of my mutual fund holdings in my taxable accounts, so I can avoid having to prepare a Schedule D (including those fairly new additional forms related to Sched D). This also happened in 2011. However, I also will be taking the Standard Deduction instead of itemizing my deductions using Schedule A. This happened in 2012 but not in 2011 or any other year since I began investing in taxable account mutual funds in 1990.
The combination of these two things (no Sched A and no Sched D) means I can switch to filing the shorter and far easier Form 1040A for my 2013 income taxes. Cap Gain distributions and Qualified Dividends are allowed on 1040A. The last time I used Form 1040A was in 1988 when I was still renting, before I bought my co-op apartment and added all the itemized deductions associated with that and having a mortgage (paid off in 1998). I was still working full-time back then, of course, so I had a W-2 form (not any more, YAY!). My state income taxes have been relatively simple after I paid off said mortgage in 1998 because I was able to switch to its Standard Deduction nearly every year since then.
This brings me to the second personal tax oddity for 2013. While I was working, my federal income tax bill was always 2x to 3x greater than my state income tax bill. This makes sense because the federal income tax brackets are much steeper than the state ones. When I ERed back in late 2008, the gap between those two tax bills shrunk a lot starting in 2009 to as small as a few hundred dollars in 2009, 2011, and 2012. Another contributor to the shrinking gap was my having a greater percentage of my income in the 0% federal bracket for Qualified Dividends and Long-Term Cap Gains. (New York taxes both as ordinary income.) But for 2013 more than half of my federal taxable income gets taxed at 0% because it is QD or LTCG. Add to that the small amount of muni bond fund interest from states other than NY which gets taxed in NY but is exempt from federal taxes. As a result, I will end up with a slightly larger income tax bill for NY than I will for the Feds, something which has never happened to me, and this is despite NY having slightly cut its income tax rates back in 2012.
Any of you ever owe your home states more in income taxes than you owe the Feds?
I found two unusual things for 2013. One is how simple my 2013 income taxes will be for the first time in 25 years. In 2013, I made no redemptions of any of my mutual fund holdings in my taxable accounts, so I can avoid having to prepare a Schedule D (including those fairly new additional forms related to Sched D). This also happened in 2011. However, I also will be taking the Standard Deduction instead of itemizing my deductions using Schedule A. This happened in 2012 but not in 2011 or any other year since I began investing in taxable account mutual funds in 1990.
The combination of these two things (no Sched A and no Sched D) means I can switch to filing the shorter and far easier Form 1040A for my 2013 income taxes. Cap Gain distributions and Qualified Dividends are allowed on 1040A. The last time I used Form 1040A was in 1988 when I was still renting, before I bought my co-op apartment and added all the itemized deductions associated with that and having a mortgage (paid off in 1998). I was still working full-time back then, of course, so I had a W-2 form (not any more, YAY!). My state income taxes have been relatively simple after I paid off said mortgage in 1998 because I was able to switch to its Standard Deduction nearly every year since then.
This brings me to the second personal tax oddity for 2013. While I was working, my federal income tax bill was always 2x to 3x greater than my state income tax bill. This makes sense because the federal income tax brackets are much steeper than the state ones. When I ERed back in late 2008, the gap between those two tax bills shrunk a lot starting in 2009 to as small as a few hundred dollars in 2009, 2011, and 2012. Another contributor to the shrinking gap was my having a greater percentage of my income in the 0% federal bracket for Qualified Dividends and Long-Term Cap Gains. (New York taxes both as ordinary income.) But for 2013 more than half of my federal taxable income gets taxed at 0% because it is QD or LTCG. Add to that the small amount of muni bond fund interest from states other than NY which gets taxed in NY but is exempt from federal taxes. As a result, I will end up with a slightly larger income tax bill for NY than I will for the Feds, something which has never happened to me, and this is despite NY having slightly cut its income tax rates back in 2012.
Any of you ever owe your home states more in income taxes than you owe the Feds?