Beginning quarterly tax payments

Forum|Forum|5 years ago
January 12, 2021
1 reply
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My wife and I are retired and owed no tax in 2019. I made one IRA withdrawal during 2020 which will result in tax owed in the 2020 tax return. My reading of the IRS code is that we didn't have to pay estimated tax during 2020 since I met all 3 of their exemption conditions 1) No tax liability prior year 2) US Citizen 3) Prior Tax Year 12 months. So...I'll pay what we owe with our 2020 income tax filing.

Moving into 2021 we will not be taking IRA distributions. We will be living off social security and savings. Since I owe tax on 2020 will quarterly estimates be required in 2021? I live in a no tax state so I guess I should have tax withdrawn from our social security for federal tax?

Best answer by VolvoGirl

If you only have Social Security income you do not have to file a return.

Do you need to file a return?

https://ttlc.intuit.com/community/filing-and-paying-taxes/help/do-i-need-to-file-a-federal-return-this-year/00/25546

Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

MinhT1

Level 15

If you planned no IRA distributions in 2021, most likely you will have no tax due in 2021 with only your social security benefits (as in 2019). Therefore, there no need to pay estimated taxes for tax year 2021 and no need to have taxes withheld from your social security checks.

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cobia2Author

Level 2

Thanks...forgot to mention that my wife will receive additional SS benefits beginning Jan 2021 (her spousal benefit). So, I guess I need to find a calculator to determine if I will have any tax obligation. We will have $53,000 SS income, no IRA withdrawals, no capital gains or other sources of income. Will supplement that income as required via cash savings account. We file joint married and take the standard deduction.

What do you think...should I fill out a 2020 short form to see if tax will be owed on $53K of SS income?