Posted on 08/05/2019 12:14:56 PM PDT by Raycpa
Or at least stop taxing SS benefits.
Nice idea. I love it.
But there is one little problem with it. Retired folk soon pick up the privilege of paying a new tax—on any required IRA and 401K withdrawals that being at age 70—or instead pay the IRS a high penalty if their withdrawal is not made on time.
Truly nothing is sure in life but death and taxes.
Or at least stop taxing SS benefits.
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I’ll be 77 this month, and single since 1995. In the early 2000’s I began doubling my mortgage payments (paid off mortgage 10 yrs. early). By 2004, my interest deductions were so low that even with property taxes I could no longer use Skd. A, so used the higher standard deduction.
Since age 65, I have used the worksheet for figuring the tax on SS benefits. Every year I have to pay several thousand with my paper return. Since about 2010, I’ve gotten a letter from the IRS in June explaining that I owe more $$ because I didn’t pay more SS tax plus fines for late payment. ....This June that was $896.
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It’s not like they expect blind folks to actually fill out their own data...I like the relative simplicity of the form....not a post card but closer.
LOL! It still beats a rape divorce in the USA.
I see under deductions it gives ‘standard’ or ‘itemized’. I wonder if my wife and I get any deduction for us and being over 65, if we use itemized to include what we give to charities?
You use whatever is greater. All your itemized deductions or the standard deduction. If you are making regular contributions and you are also taking minimum distributions from IRA you can consider having your IRA make the contribution. This way you get the tax deduction for the charity PLUS the standard deduction.
If I understand you correctly, under itemization, only my charitable contributions count, not like the old time a couple of years ago, when I got 2 x $6,000 for my wife and I just for filing and then another 2 x $6,000 for both of us being over 65 and could still take my charitable and property taxes? Or should I just use turbo tax and let it figure it out? I”ve used turbo tax for several years, except for last year when I retired plus moved and sold/bought houses...for that I got an accountant to do my taxes.
The standard deduction for married both over 65 is currently $26,600. So if your charity plus up to 10k in taxes plus interest on mortgage plus excess medical expense is less then you would take standard deduction and charity won’t change your taxable income.
However, if you are over 70 1/2 and have an IRA you could have charity paid from IRA and deduct that from your income thereby getting a tax deduction for you charity plus getting your standard deduction of $26,600.
https://www.investopedia.com/taxes/can-i-use-money-my-ira-donate-charity/
“I see under deductions it gives ‘standard’ or ‘itemized’. I wonder if my wife and I get any deduction for us and being over 65, if we use itemized to include what we give to charities?”
With the new standard deduction, you have to have big medical expenses or really high property taxes to justify itemizing. Nobody in my house (3 of us) came close to exceeding the standard deduction on a Sched. A.
Additionally, you have to make at least $25,000 (estimate) before you pay any income taxes at all. The tax rate on your first $13K is 0 and then you get the $12K+ standard deduction. You pay income tax on the amount above $25K.
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