topic Re: Pension in Get your taxes done using TurboTax

Pension

Beths0823 — Wed, 24 May 2023 19:01:20 GMT

I am single with no dependents. June 1st I will begin collecting a monthly pension of $1800/month in addition to my full-time salary at another job. I had to fill out a W-4 for the pension. How can I be assured that I won’t owe a significant amount in taxes with this additional income

Re: Pension

LynnMcQ — Wed, 24 May 2023 19:11:17 GMT

Hi, it sounds like 2023 will bring changes to your tax life.

Keep in mind that your goal is to have adequate withholding from all sources combined at the end of the year. I think that using a W-4 Calculator tool is one of the best ways to take the surprise out of tax day. If you enter your projected information into the calculator, it will let you know what your total withholdings should look like. You can use your month earnings statements to verify that your withholding is on track and make adjustments if needed.

Re: Pension

MelodyB — Wed, 24 May 2023 19:16:55 GMT

Hi Beths0823,

It's always exciting when we get additional income but then you have to worry about the tax.

Since you will only receive the pension income for 6 months that's $10,800 of additional income. You could look on your 2022 tax return to see what your tax rate is and then multiply it by the $10,800. Then you could make estimated payments. Or you could update your W-4 to just withhold an additional amount from each paycheck. I am including our W-4 calculator which people find very helpful.

https://turbotax.intuit.com/tax-tools/calculators/w4/