topic Re: PUB 721 in Retirement tax questions

PUB 721

dgoff_12 — Wed, 29 Dec 2021 16:50:46 GMT

I have retired this year 2020 from the FERS and Military. Therefore, I am receiving an annuity from both. I am also receiving monthly distributions from my TSP and South Carolina pays $100 monthly for retirees of the National Guard. My wife is still working. A few questions. What is the best way to file, separate or joint? Does your program/software support IRS Pub 721? I was told by HRO to use this publication while filing my first retirement year. We have been using online Turbo Tax for over 10 years.

Re: PUB 721

BillM223 — Wed, 29 Dec 2021 20:03:40 GMT

First, you are usually better off filing joint than separately. This is because certain credits are not available for those filing separately. Your standard deduction is highest and tax rate lowest when filing joint. I won't say that you will always be better off filing joint, but unless you have a special situation, file joint.

An example of a special situation is one spouse having huge medical expenses which get diluted in a joint return. However, when you file separate and one spouse itemizes to get the medical deduction, the other spouse must also itemize which often results in little or no Itemized Deductions for the other spouse - you have to run the return(s) both ways to see how it works out.

All the things you listed above (annuities, TSP, etc.) are supported in TurboTax. IRS Pub 721 is the "Tax Guide to U.S. Civil Service Retirement Benefits" (this is the 2020 version). This publication describes annuities, TSPs, distributions from retirement accounts, and the like. This publication collects a lot of information pertinent to retirees from Civil Service in one place, but this information is found in other publications as well. This is all supported by TurboTax.

Re: PUB 721

dgoff_12 — Thu, 30 Dec 2021 13:30:35 GMT

Great to hear! Thanks for the advice and the comments.