The IRS is accepting 2021 taxes

[deadeye]

Hard to believe they started accepting electronic filing early this year. I give it a few days before changes are required. 
Good news is there are less possible changes currently in discussions than there were at this time last year.  All the tax law changes enacted during the tax filing season made it a nightmare for sure.  Then Minnesota after flip-flopping on taxing the $10,200 excluded by the feds finally decided on June 30th (after everyone had filed) to conform to the Feds and not tax the first $10,200 of unemployment.  This late change of mind ment that every Minnesota tax return with reported unemployment had to be refigured by the State.   
I suggest that anyone who reported unemployment on their Minnesota return, verify that they did indeed get the "automatic" adjustment from the MDOR.  Also, for this year electronic file if possible and use direct deposit.
     

[LPS]

Always appreciate your info on these things DE!  Thank you.

[Leech~~]

Hard to believe they started accepting electronic filing early this year. I give it a few days before changes are required. 
Good news is there are less possible changes currently in discussions than there were at this time last year.  All the tax law changes enacted during the tax filing season made it a nightmare for sure.  Then Minnesota after flip-flopping on taxing the $10,200 excluded by the feds finally decided on June 30th (after everyone had filed) to conform to the Feds and not tax the first $10,200 of unemployment.  This late change of mind ment that every Minnesota tax return with reported unemployment had to be refigured by the State.   
I suggest that anyone who reported unemployment on their Minnesota return, verify that they did indeed get the "automatic" adjustment from the MDOR.  Also, for this year electronic file if possible and use direct deposit.
     

deadeye you like an accountant guy?  If you know or anyone else.  My wife retired last Aug.  She's on SS and has a small pension.  She just got a letter from SS saying if you get a pension you need to let them know.  Do they lower your SS if your getting a small monthly pension payment? 

[deadeye]

Leech~~,
First off no, I am not an account or financial advisor. I always tried to learn and understand just how these things work and are interrelated.  I did this to help me take full advantage of the tax laws and other financial matters.  For the past 12 years I have prepared taxes for AARP under the TaxAide program. It's a volunteer position paid only smiles and good conversation and a thank you. Each year before the tax season all volunteers must take a number of tax courses and pass a Certification test. During the course of training and preparing taxes I encounter numerous situations that require some research. Oh, almost forgot your question.
 
She may have received a SSA Notice if she had participated in a defined benefit plan that failed. She may be due a benefit from PBGC (Pension Benefit Guaranty Corporation) if:
PBGC took over her plan after it ended, she was fully qualified or vested in the plan before it ended; and
has not already received the benefit from the plan via, for example, a single lump-sum payment, an IRA rollover, or a purchased annuity. If the plan ended in a standard termination, the plan administrator certified that all eligible participants and beneficiaries received their pension benefits. However, in rare circumstances, a participant or beneficiary may have been missed. 

[Leech~~]

Leech~~,
First off no, I am not an account or financial advisor. I always tried to learn and understand just how these things work and are interrelated.  I did this to help me take full advantage of the tax laws and other financial matters.  For the past 12 years I have prepared taxes for AARP under the TaxAide program. It's a volunteer position paid only smiles and good conversation and a thank you. Each year before the tax season all volunteers must take a number of tax courses and pass a Certification test. During the course of training and preparing taxes I encounter numerous situations that require some research. Oh, almost forgot your question.
 
She may have received a SSA Notice if she had participated in a defined benefit plan that failed. She may be due a benefit from PBGC (Pension Benefit Guaranty Corporation) if:
PBGC took over her plan after it ended, she was fully qualified or vested in the plan before it ended; and
has not already received the benefit from the plan via, for example, a single lump-sum payment, an IRA rollover, or a purchased annuity. If the plan ended in a standard termination, the plan administrator certified that all eligible participants and beneficiaries received their pension benefits. However, in rare circumstances, a participant or beneficiary may have been missed.

No she is getting her monthly pension plan payment.  I guess the question is.  If she reports it to the IRS as the letter states will they then lower her monthly SS benefit because she is getting the pension payment?  It's only like $425 a month.   

[glenn57]

leech, i'm getting a pension also, i dont recall a letter like that, but they, neither the pension nor SS deducted anything because of one or the other.

not sure why they would either. i did however question my pension whe nthey asked that i submit proof of my wifes SSD ??? wanted to know what that had to do with my income?????? it never played into any issues though!!!!!

[Leech~~]

leech, i'm getting a pension also, i dont recall a letter like that, but they, neither the pension nor SS deducted anything because of one or the other.

not sure why they would either. i did however question my pension whe nthey asked that i submit proof of my wifes SSD ??? wanted to know what that had to do with my income?????? it never played into any issues though!!!!!

Have you been doing it a full year now?  How did your taxes at the end of the year go?  Do you claim SS and the pension part as yearly income?  She new at this and haven't gone through a tax cycle yet. 

[glenn57]

For 2020 tax year it was for 3 months. Don't have a clue for tax year 2021 yet. Both the pension and SS take out federal taxes, but not state so we are on the quarterly payment plan for state taxes. Our tax guy figured it out for us.

Yes you have to claim both as income. And if she didn't set it up to have federal taxes taken out look out. That happened to us, we got bit by the state because of those 3 months, but I set up the federal right away.

[mike89]

Leech, I have a pension and no issues for me either..  only thing I did is have all of them take out taxes before payment to me...  I sure would think she is good... 

[Leech~~]

Thanks guys.  Guess it's time to make a list of questions for her new tax guy she will be seeing soon. 

[Gunner55]

I get a very small pension along with my SS too. Even though I'm not required to file I almost always do. Mine are simple so it's a short form, 1040A usually, & easy too so I always do them myself filing electronically for free. Last year I got a statement from SS that said I could make another $18,800 before it affected my monthly SS amount. Then it was $1 < SS for every $2 > that I went over that amount. Last year I had to use my brother's Turbo Tax program though as I had a 1099-S from the sale of Mom's house to report & I couldn't electronically free file with that.

[glenn57]

I get a very small pension along with my SS too. Even though I'm not required to file I almost always do. Mine are simple so it's a short form, 1040A usually, & easy too so I always do them myself filing electronically for free. Last year I got a statement from SS that said I could make another $18,800 before it affected my monthly SS amount. Then it was $1 < SS for every $2 > that I went over that amount. Last year I had to use my brother's Turbo Tax program though as I had a 1099-S from the sale of Mom's house to report & I couldn't electronically free file with that.

gunner.......i read something somewhere somehow there is no free filing......not sure if its the turbo tax or not???????

i used to do my own with turbo tax.......just plain filing it yourself was a total PITA, big time. i gladly will pay the $200.00 to have someone else do it. just wealk in the door drop it off and tell them have fun!!!!!!!!!no stress, no cussing and swearing..................... 

[Leech~~]

I get a very small pension along with my SS too. Even though I'm not required to file I almost always do. Mine are simple so it's a short form, 1040A usually, & easy too so I always do them myself filing electronically for free. Last year I got a statement from SS that said I could make another $18,800 before it affected my monthly SS amount. Then it was $1 < SS for every $2 > that I went over that amount. Last year I had to use my brother's Turbo Tax program though as I had a 1099-S from the sale of Mom's house to report & I couldn't electronically free file with that.

gunner.......i read something somewhere somehow there is no free filing......not sure if its the turbo tax or not???????

i used to do my own with turbo tax.......just plain filing it yourself was a total PITA, big time. i gladly will pay the $200.00 to have someone else do it. just wealk in the door drop it off and tell them have fun!!!!!!!!!no stress, no cussing and swearing..................... 

My wife did our taxes forever.  But now that shes retarded, oop retired she be all screw that!      

[Steve-o]

As a bachelor and into our early marriage I did the taxes.  That is until I got a scary letter from the IRS that I owed them a bunch of money and they were going to take everything I had.

Long story short, I took it to a guy and he found I was missing 1 form that dealt with child care reimbursements, he submitted the form, and everything was good - I didn't owe anything.  He did my taxes for years, and like you said Glenn, ZERO stress.  It was the best $200 I spent all year.

Later, I did taxes for my kids with TurboTax while they were in high school and college and that worked for a while.  Then they started earning income out of state and were dealing with rent credits and college loans and their own retirement funds - then the TurboTax step-by-step wizard got more confusing.  My advice to them now is to go find a guy near where you are living to do them for you.  It will be the best $200 bucks you spend all year. 

I think dad is officially retired from the accounting business.

[Leech~~]

That is until I got a scary letter from the IRS that I owed them a bunch of money and they were going to take everything I had.

Auu, that's just some scammer from India.  I just hang up on them or shred their letters!      

[LPS]

 

[Gunner55]

 Not sure where you get your info but that's not true. I've been doing my own for 30+ years for free. It's just SS, a little pension, plus 2-3 1099 INTs for my income now & then it's always just the standard deductions for me so it's EZ peasy. I know they're right when the IRS & the state accepts them when I e-file them. I'm not paying someone $50-$100 to do what I can do in ~ a 1/2 hour & it's usually just 1040 & 1040A that are usually free. I've been using H & R Block lately but there are others. https://search.yahoo.com/search?fr=mcafee&type=E211US1289G0&p=free+tax+filing+online+federal+and+state

[glenn57]

Not sure where you get your info but that's not true. I've been doing my own for 30+ years for free. It's just SS, a little pension, plus 2-3 1099 INTs for my income now & then it's always just the standard deductions for me so it's EZ peasy. I know they're right when the IRS & the state accepts them when I e-file them. I'm not paying someone $50-$100 to do what I can do in ~ a 1/2 hour & it's usually just 1040 & 1040A that are usually free. I've been using H & R Block lately but there are others. https://search.yahoo.com/search?fr=mcafee&type=E211US1289G0&p=free+tax+filing+online+federal+and+state

like i said i read something somewhere that some form of tax filing isnt going to be free........ i didnt say for certain.........what......like i said..i dont remeber what it was!!!!!!!

[mike89]

every March I take my taxes in to the tax feller and drop them off.. $75.00 later I'm done and he does the property tax too at the same time...

[deadeye]

Leech~~,
There's a number of web sites out there that you could use to enter your data to see what your tax liability would be. Don't use any real personal data (address, birthdate, SSN, phone number etc) just enter numbers like Pension payment $12,350 with $370 paid in taxes.
Social Security payments $15,500 and withholding.  1099-R numbers.  This should result in your actual Federal and State tax. Use this to determine how much to withhold from one or various income sources. Note: All withholding is lumped together on your tax form so you can have all taken out of one source if that's simpler.  People ask is Social Security taxed.  Hard question to answer because it depends on a couple things. First add all your non SS income and 1/2 of your SS income. Then subtract $32,000 from the first amount. Then take half of that amount. This may be the amount of SS that's taxable. It will never be more than 85% of your total SS payment.

Gunner55,
It is a very good Idea to file both federal and state taxes every year even if you are not required to file. This prevents or at least alerts you to possible ID theft.  Also, this will help you get future Stimulus payments if they are authorized, and you can recover any taxes withheld.

glenn57,
Just curious, when you pickup the completed taxes, do they go over the line items with you or ask a lot of questions? Or, just hand you a packed of printed forms and send you on your way. I'm sure most preparers do a fine job however, each year we seem to get a number of people who bring in their previous years taxes (from paid preparer) that when checking find some issues were incorrectly reported.  Several tax items are frequently reported incorrectly. 1. Military pension - preparer failed to subtract from Minnesota income (not taxable in Minnesota). 2. Education expenses with Scholarships. Simple way is to not include scholarships in education expenses. However, in some cases claiming it as income and then deducting the entire education costs results in a much larger credit. 3. Failure to prepare the Property Tax refund form.


 

[glenn57]

deadeye, yes they sit down with you to go over everything. since i was retired i specifically requested a sit down prior to them actually doing them because, like Leech i had questions. i wanted to pay off my house with some of my annuity.....yea the hit on that was out of this world on the tax and fees for withdrawal.....no way.  he did suggest taking small bites and we havent decided yet.

i dont have any of those expenses you listed so no worries there. the other concern i had was no state taxes taken out.......i didnt want to get clobbered come tax time next time around, hense the 1/4erly payment plan. we shall see here in a few months how that pans out.

since my wife usually brought them in i didnt know how they went about it really, but as i understand it and they did it last year they sat down with us, went over it and gave us a rough estimate on where we would land.

we still have not recieved that check from the unemployment taxes they took out. it may have something to do with us/me wanting the check and not direct deposit. and with indecision by the state last year we waitind till the very end before we had them e-file it!!!

[Leech~~]

Leech~~,
There's a number of web sites out there that you could use to enter your data to see what your tax liability would be. Don't use any real personal data (address, birthdate, SSN, phone number etc) just enter numbers like Pension payment $12,350 with $370 paid in taxes.
Social Security payments $15,500 and withholding.  1099-R numbers.  This should result in your actual Federal and State tax. Use this to determine how much to withhold from one or various income sources. Note: All withholding is lumped together on your tax form so you can have all taken out of one source if that's simpler.  People ask is Social Security taxed.  Hard question to answer because it depends on a couple things. First add all your non SS income and 1/2 of your SS income. Then subtract $32,000 from the first amount. Then take half of that amount. This may be the amount of SS that's taxable. It will never be more than 85% of your total SS payment.

Thanks deadeye.  My wife is all over it. She texted me at work this morning telling me she call her new tax guy and got some figures from him.   
 

[mike89]

yup my guy does a sit and question time too..  seems to cover things very well...

[Gunner55]

DE that's how I got the 2nd Stimulus check($600) last year as I never got it when everyone else did. I had to e-file my taxes & get it as a Recovery Rebate Credit with a whole $2 in interest.

[Leech~~]

For the past 12 years I have prepared taxes for AARP under the TaxAide program. It's a volunteer position paid only smiles and good conversation and a thank you.

deadeye, that is outstanding of you. To use your time to help others doing something most people hate or can't figure out and you do for nothing to help folks is very admirable. 
You don't do free dentistry on the side too do yeah?