First retirement year tax filing - surprise tax penalty!
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We have an often very complicated tax return. We use TurboTax and have been very happy with it. Started using it when we moved and neither of us could figure out a multi state issue. TurboTax saved us $1,500 over our own calculations so has royally paid for itself.
Note: One of us is an IRS person and the other is a finance major and we still had issues.
Another way for Uncle Same to nickel and dime tax payers. What difference should it make as to whether a tax amount is enough quarterly…..as long as what I owe they get by April 15th of the next year.
But noooo…they established some B.S. quarterly reporting crap rule.
There was a time where there was no withholding at all and the country managed to function. And I'm not saying there shouldn't be ANY withholding, but to have that "quarterly" requirement in B.S.
I'm surprised TT didn't give you an option to figure the penalty based on quarterly income. H&R Block gave me all the options. I underpaid my first retirement year, but the penalty was under $25.
Thanks for this thread & info, I withdrew the bulk of income from my IRA in November (& had Fidelity withhold taxes). My blood pressure went up with the first page but is now in normal range! I will remember this thread if I see a penalty doing my taxes.
(BTW I dropped TurboTax last year after using them for 10+ years, they were very deceptive in changing what was included in the deluxe/basic/pro etc versions - forms previously included were now more expensive - & kept raising prices while eliminating these. TaxAct imported all the TT info from the previous year & was much cheaper. This year I am going to see if I can use a free online services for 65+ yo)
I use Turbotax to estimate incoming tax years. Like right now I have 2017 and 2018 in the works, I want to see how much IRA I can convert to Roth without hitting the limit. I'm surprised that you owe that much in penalty. I think it's safe to know if one pays more than 90% of previous tax year, one should be ok. In the past, I might owe some tax penalty in some years, but never more than $70 a year. Small price I have to pay for not paying estimated tax. But cheaper than hiring a tax preparer.
I have used TurboTax for several years. Just filed my 2016 with it. How/what are you using/getting to estimate the coming years? I am looking to sell some stock to purchase a new car and want to know how "bad" I would get hit.
I have used TurboTax for several years. Just filed my 2016 with it. How/what are you using/getting to estimate the coming years? I am looking to sell some stock to purchase a new car and want to know how "bad" I would get hit.
Thanks
Basically same software with different numbers. Close enough for me to do estimation.
IRS sent me a list of places to get free tax service. All we have is soc sec and interest on savings which is pathetic with interest rates as they are now. The program they set us up on said our tax form was too complicated for free and we would have to pay $45.
If anything could have been more simple than our tax liability I don't know what it could have been. I haven't trusted them since.
IRS sent me a list of places to get free tax service. All we have is soc sec and interest on savings which is pathetic with interest rates as they are now. The program they set us up on said our tax form was too complicated for free and we would have to pay $45.
If anything could have been more simple than our tax liability I don't know what it could have been. I haven't trusted them since.
There is something more to this story. Here are the requirements for free prep generally at the IRS:
If all you have is SS and a small amount of interest, you might not be required to file and they will not file just because you ask. In that case, they would send you away and tell you to pay to get the return filed.
Taxact just doubled in price this year if you need to file a state return. Used to use Turbotax until the price skyrocketed a few years back. Then Taxact. This year using freetaxusa. $13 including state. My situation is not that complicated, though.
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