My wife and I are retired. We filed our Federal and State for 2019 and are trying to calculate our Estimated taxes for 2020. Our income consists of one pension, two IRA distributions, two Social Security distributions, interest, and dividends. We take the standard deduction. When I use the estimated taxes feature on our 2019 edition of Turbo it assumes we have wages, which we do not. and seems not to have a taken into account we are retired and only 85% of our social security is taxed. How does one handle 2020 estimated taxes if one is retired and collecting Social Security?.
What I did was re-save my 2019 tax forms as ESTIM-2020 and change the amounts that I will receive in 2020 for the pension, IRAs, and Social Security. Is this an acceptable way to calculate 2020 Estimated Taxes?
Yes, that is an acceptable way to estimate your taxes for 2020.
One confusing aspect of the W-4 and Estimated taxes section in TurboTax is that you are asked about Form W-4 first, which does not apply if you are retired. If you answer the question, Do you want to review your W-4 forms? No, it moves on to ask about other income you expect to receive in 2020.
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