Bill a real eye opener. I gave up on H & R Block. Use a
retired CPA. His charge is between $150 to $200. I get a 10
percent loyalty discount.
I also pay estimated taxes to the Feds and State of
California. If I get a refund it is applied to the estimated
return. If you have any investments that are paying out
income now or in the future and they do not offer tax
withholding then you would probably need to pay estimated
taxes.
Also this year I have the required minimum distribution (RMD)
based on my life span, 24.7 years divided into the value of
my 403-B (7) equals the amount needed to be removed.
Otherwise there is a penalty. This affects estimated taxes
too. I told my CPA the amount and he already figured the
amount of extra estimated taxes.
My wife retired so we make less money now, a good thing, so
the extra RMD distribution is not a tax bracket increase. And
that would be a very bad thing to have to pay more taxes.
If any teacher has a tax shelter including regular IRA then
you will have to pay the RMD the year you turn 70 1/2. If you
are born in the second half of year you can wait to the
following year.
Life is fun. Retirement is better each week!
On 4/14/16, Bill T NC (now retired) wrote:
>
> Just tiled my 2016 taxes.
>
> For the third year running, I owed the IRS as HUGE chunk of
change....
>
> Seems my trouble stems from two sources:
>
> first, I didn't realize, two years ago, when I began
drawing social security, that I
> needed to request tax be withheld. I have now, but I have
been burned three times
> in the meantime.
>
> Second, with my state and military retirement, I was taxed
only at a 10% rate, since
> it is assumed that each would be my sole means of income.
When all was totaled
> up, I was put into the 25% tax bracket and WHAM.
>
> My tac consultant (H 7 R block) advises me to have more tax
withheld from my two
> pension to solve this.
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