2024 Turbo Tax questions
I am 74 and my wife is 70. My wife and I are both retired. She for 1 year and I for more than 12 years. We file Married Jointly.
Our incomes are based on the following:
I receive a pension and Social Security checks monthly. Additionally, I receive annual funds from RMD distributions from my deferred comp account.
My wife receives similar monies with the exception of RMD distributions as she has not reached the required age.
For myself:
In 2023, our tax rate was 12.58%. My pension withheld at approximately that amount.
Neither my Social Security (0%) nor my RMD distribution (10%) withheld enough tax.
The result was that at the 12.58% tax rate I was short (under withheld) by $1307.
For my wife:
Because my wife worked until August of 2023, she was collecting a paid salary AND Social Security payments.
Her salary withholding was an additional $700. more than was required; however, both her Social Security (0%) and pension (.015%) under withheld.
At that same 12.58% tax rate, she under withheld by nearly $3900.
Our total owed was around $5200. There were also penalties added for not withholding enough.
I paid this 2023 tax with penalty and additionally am currently making quarterly 2024, 1040ES Payment Vouchers to make up for this underpayment.
Obviously, now my wife is retired, her 2024 paid salary will be gone. The question is: Do we proceed to increase withholding on our pension percentages or wait it out and see how taxes look this year?
