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Ok so I go to a new tax accountant and I have to always now pay the Federal a fat check which makes no sense to me.
I had extra money taken out of my earned every penny pension.
I have money to add to the low income pension from an annuity. It runs out of money next year.
I now receive social security checks and pay for Medicare from that account.
So why am I having to pay so much money come income tax time? I asked my CPA and was told I am not paying enough taxes from one of the income accounts and he doesn't know which one it is. That is why I made arrangements to have extra taken out for taxes in the pension. My pension is very low so I really don't get it as to why? I was not sure which one to have extra taken out from. Should I have had extra taken out from the annuity?
Why do I have to keep paying even more on any income when the three incomes already have money for taxes taken out in the 1099?
how can anyone answer this ? without your financials you may as well ask us how long is a rope
I don't have a large income of $100K I thought it had something to do with if you (we) earn $12K yearly and are a single filer.
Also my CPA is getting expensive too. I hope we get a new administration that cuts down on needing to pay a cpa. I went to the online cpa called tax act. The woman there tried to get me to lie on the form by telling me click that I am disabled. I told her I do not get disability checks but she insisted the government will give me a tax break for being disabled. She insisted that I am disabled because I had to retire early and saw I was losing money for doing that. I explained the enormous pain I was in and had to retire early due to the pain. But I never filed for SSDI and wish now I had because it is more SS money. But be that as it may and it was much cheaper to go online and just answer the questions it was also IMHO illegal to try and get a customer to lie on the tax forms saying I am disabled. I told her over and over again the IRS doen'st care if I am disabled they only care about if I am get those checks which I am not.
Now that I am going to a real CPA not some jackass at Tax Act I have to pay more to make sure my taxes are done right and I am not doing this bunch of forms deductions either. Just straight single filer. But my income is more than $12,000 and less than $100k.
Ok so I go to a new tax accountant and I have to always now pay the Federal a fat check which makes no sense to me.
I had extra money taken out of my earned every penny pension.
I have money to add to the low income pension from an annuity. It runs out of money next year.
I now receive social security checks and pay for Medicare from that account.
So why am I having to pay so much money come income tax time? I asked my CPA and was told I am not paying enough taxes from one of the income accounts and he doesn't know which one it is. That is why I made arrangements to have extra taken out for taxes in the pension. My pension is very low so I really don't get it as to why? I was not sure which one to have extra taken out from. Should I have had extra taken out from the annuity?
Why do I have to keep paying even more on any income when the three incomes already have money for taxes taken out in the 1099?
It doesn't matter WHICH account or source of income you have taxes withheld from as long as the total amount of taxes withheld (or paid in quarterly estimates) equal or exceed your total tax liability for the year. If you have slightly less (say about 10% less) withheld than you owe, that's no problem. You just pay the difference by April 15th.
If the amount withheld during the year (or paid in quarterly estimates) is less than 90% of your tax bill for the year, then you'll likely be penalized for UNDERPAYMENT of taxes, but there are exceptions to that.
What I suggest that you do is see how much federal tax you paid in total for 2023 plus any additional amount you may pay when you file your 2023 return and then pay 1/12 of that amount (via withholding) in taxes each month in 2024. It won't matter which pension, bank, or money source you use to pay that with as long as you end up paying an amount this is at least equal to what you paid in total in 2023.
You'll still have to file a return next year, of course, but any difference between what you paid during the year and your final total amount should be quite small unless you had some "windfall" income during the year.
This is a brief explanation and there could be some exceptions for unusual things, but if your income is pretty consistent from year to year, then this should cover you.
It doesn't matter what the source(s) of withholding are, only that the total amount is enough to avoid paying penalty and interest. If your income doesn't vary much from year to hear, just have enough withheld throughout the year so it adds up to your previous year's income tax liability. You can also make estimated quarterly payments if that's easier for you than having the withholding done at each source of income.
With respect to simplifying the tax code... don't hold your breath on that one, haha. If you want to save money on tax preparation, learn to use TurboTax or other tax software (some are even free, I believe).
You're confusing the reconciliation of your withheld taxes in April, with your actual total tax bill.
What you SHOULD want, is to be under-withheld to the maximum amount that doesn't trigger penalties, so you write a check every April for taxes. If you get a refund, what that means is that you've given the US government an interest-free loan on that money for much of a year.
The way to get your withholding to the amount you want - whether flat, or a small refund, or a small check, or whatever - is to pre-figure your taxes then adjust your withholding accordingly. There's no such thing as "one account not having enough" - it's your total income that drives your total tax bill and your total withholding. The thing to do is to use whatever income source makes it easiest to adjust withholding, to adjust your withholding.
It doesn't matter WHICH account or source of income you have taxes withheld from as long as the total amount of taxes withheld (or paid in quarterly estimates) equal or exceed your total tax liability for the year. If you have slightly less (say about 10% less) withheld than you owe, that's no problem. You just pay the difference by April 15th.
If the amount withheld during the year (or paid in quarterly estimates) is less than 90% of your tax bill for the year, then you'll likely be penalized for UNDERPAYMENT of taxes, but there are exceptions to that.
What I suggest that you do is see how much federal tax you paid in total for 2023 plus any additional amount you may pay when you file your 2023 return and then pay 1/12 of that amount (via withholding) in taxes each month in 2024. It won't matter which pension, bank, or money source you use to pay that with as long as you end up paying an amount this is at least equal to what you paid in total in 2023.
You'll still have to file a return next year, of course, but any difference between what you paid during the year and your final total amount should be quite small unless you had some "windfall" income during the year.
This is a brief explanation and there could be some exceptions for unusual things, but if your income is pretty consistent from year to year, then this should cover you.
Thank you. I will look up what I already paid from what was taken out on the forms then add the dollar amount of the check I had to write out as extra paid. Geez I would think they would automatically deduct from pension, SS and things like annuities so we don't have to write out extra money checks to them.
When you say tax bill I automatically think tax bill from my town I receive. But that isn't the bill you are referring to is it? It is the bill the Federal Tax says I owe after already filing my taxes. I'm considering changing my annuity monthly payments to half so I can stretch it out.
You said that you "now" receive Social Security checks...is that new for you? That might be why your taxes went up. Depending on your income level, 50-85% of your Social Security income is taxable.
And those Medicare premiums? Well it's not like health insurance premiums withheld from an employer's paycheck, where the premiums are "pretax" so you get the deduction for them essentially even if you don't itemize. The only way to get your federal tax deduction for your Medicare premiums, is if your total medical expenses exceed 7.5% of your adjusted gross income for the year and you itemize your deductions. Otherwise, those premiums don't affect the taxability of your Social Security income.
And unless you file a specific form for it, taxes will not be withheld from your Social Security.
I'm just shooting in the dark, because as Mathjak says, a lot of possible factors can go into a tax return and alter the equation and your tax bill....but from what you've given us here, that's my best guess.
I doubt that it's because you got a new tax accountant, assuming that neither your old nor new one is utterly incompetent. Taxes in general...while you can do some planning to change the outcome, once your choices have been made there's typically only one correct answer in the end. It's math, not wizardry.
Thank you. I will look up what I already paid from what was taken out on the forms then add the dollar amount of the check I had to write out as extra paid. Geez I would think they would automatically deduct from pension, SS and things like annuities so we don't have to write out extra money checks to them.
When you say tax bill I automatically think tax bill from my town I receive. But that isn't the bill you are referring to is it? It is the bill the Federal Tax says I owe after already filing my taxes. I'm considering changing my annuity monthly payments to half so I can stretch it out.
I'm not referring to your property taxes from the town. That has nothing to do with your federal INCOME taxes unless you were to itemize and I seriously doubt that would benefit you at all. Standard Deduction is all you need.
BTW, if you want to your income sources to withhold tax or withhold MORE tax, you have to fill out a simple Form W-4 telling them how much you want withheld and then return the form to the income source such as your employer, or Social Security Administration, or VA, or whatever.
Check around and see if any organizations sponsor free tax preparation for seniors. AARP does them here through the public library. You don’t have to be an AARP member.
Or as suggested above, learn how to do your taxes via Turbo Tax or some other software.
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