First year of retirement - need to understand how to file taxes for 2022

[TJ2022]

Both husband and I retired late 2021.  2022 is first year of retirement with no income (we are using our savings). Not old enough to collect SS.  He gets a small pension which we use for medical, we utilize the HSA for premium payments.

We will not be receiving any W2's, will be receiving 1099's for investment income and then statement for pension.    What is the proper way to file taxes for this year and subsequent years leading up to when we begin SS?

Thank you - metrojetro

[jeffvikings]

Tax filings do not change dramatically when you retire.  The first thing to consider is you may have many planning opportunities to look at during your low income time as you wait to collect social security.  Many people in the retirement years people miss out on opportunities to take gains or do Roth conversions and pay a low rate of tax.  

Planning opportunities to look at during these years include:  **Warning state taxes apply to these items so contact your turbo tax expert to see how it could change if you include the state. 

1)  Roth IRA conversions.  Here is a link that describes this potential opportunity Roth Conversion  Take note this increases your taxable income and you should put proposed number into Intuits Taxcaster tool to see how much tax you may owe.  You can change the amounts to come to the optimal spot that you feel comfortable.  Here is the link to taxcaster for reviewing this opportunity  Taxcaster .

2)  Recognizing Long term capital gains on sales of investments.  Provided that you are in the 12% tax bracket or lower the tax rate on long term capital gains is 0%  yes 0%.  To determine how much you can make to be below 12% you can go to intuits tax bracket calculator using this link Tax bracket calculator 

3)  Cashing in government bonds series I or EE bonds.  Interest is often only reported upon redemption of these bonds. 

As you see there may be many opportunities to pay between 0-12% federal tax on planning opportunities.

Good luck on your planning!

[vfellows]

In 2022, you need to figure out what your total income will be from all sources. This would include items of income as noted in the reply above. 

Pensions

Investment income

Sales of assets which generate capital gains and losses

And any other type of taxable income as noted at: https://www.irs.gov/publications/p525  

Then compare that total income to the standard deduction for married filing jointly filing status. If you are both under 65 as of December 31, 2022, use the following chart.

2022 Standard Deductions

$12,950 for single filers. $12,950 for married couples filing separately. $19,400 for heads of households. $25,900 for married couples filing jointly.

What is the standard deduction for seniors over 65 in 2022?

Taxpayers who are at least 65 years old or blind can claim an additional 2022 standard deduction of $1,400 ($1,750 if using the single or head of household filing status). If you're both 65 and blind, the additional deduction amount is doubled.

If your income is below the amount of your standard deduction, then you will have no taxable income and will pay no income taxes. 

Please note: You may have to pay some kind of extra tax or penalty based on your income sources, but your income tax should be zero. Please contact Turbo Tax on these types of additional taxes or penalties. 

[fanfare]

The only difference you will see is that Form 1040 Line 1 is small or ZERO.

@jeffvikings