Retirement Taxes

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are probably other considerations you need to think about before you retire as well, depending on your age, financial circumstances, whether you have a pension, your SS claiming strategy, Roth conversions:

https://www.schwab.com/learn/story/6-things-to-do-if-youre-nearing-retirement

Thank you. I have met with a financial advisor and discussed most relevant topics (my budget in retirement, social security strategy, insurance options, etc). We did not discuss, however, my PROCESS for paying taxes.

Another new life phase lies ahead! She may have thought I use and accountant, but I have not up to now.

It is not at all complicated. You can do it all on line. You just need to know how much to pay.

Pschaw! It will feel complicated when you are in your 80s or 90s.

By the time OP (or anyone) is in their 80s or 90s, they would have 15-20 yrs experience on what their annual income is and what the taxes on that are. It's super easy to make estimated payments to the IRS -- you just need to have an idea of how much you need to pay. If you go on the IRS site, you can easily make a payment for $xxxx. Print out a receipt and you're done. The first year or two may have require some guessing, but by the 3rd year, OP will know what her annual income, and taxes will be. You do not need "an accountant" for this.

[Anonymous]

Fwiw my dad did the taxes growing up but got a fine for under payment the first year of retirement. May be worth an accountant that first year at least.

[Anonymous]

No, keep your money and pay the fine. It’s what my accountant advised.

[Anonymous]

Anonymous wrote:Fwiw my dad did the taxes growing up but got a fine for under payment the first year of retirement. May be worth an accountant that first year at least.

The fine is very small, something like a few percent interest on the amount owed, so I wouldn’t worry too much about it.

There is are “safe harbors” you can look up that enable you to avoid any fines - eg if you pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or you owe less than $1,000 in tax after subtracting withholdings and credits.

[Anonymous]

I paid a fine the first year we had a nanny because I didn't realize I needed to pay quarterly taxes on the withholdings from her pay. I think the fine was like $50, so nothing to be crazy worried about. GL!

[Anonymous]

Anonymous wrote:I paid a fine the first year we had a nanny because I didn't realize I needed to pay quarterly taxes on the withholdings from her pay. I think the fine was like $50, so nothing to be crazy worried about. GL!

At least you did most of it right. Nobody wants to be Zoe Baird.

[Anonymous]

Anonymous wrote:No, keep your money and pay the fine. It’s what my accountant advised.

+1. I was a 1099 for a few years. The first year, I didn't have to do estimated taxes. The second year, I was too lazy to file estimated taxes and paid a penalty (income over 150K). Just continued to just pay penalties for years 3 & 4 as well. The penalties were insignificant.