I am retired now and withdrawing income from 401s and annuity accounts. Last year I miscalculated withholding federal and state taxes and I had to pay 2022 taxes and am also paying estimated taxes for 2023. How can I avoid this in the future?
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Hello,
I am sorry that happened to you. To ensure proper withholdings I would use an online tool like TaxCaster and review the W4 calculator. TurboTax also has a great article on how to estimate federal withholding. I will include links below.
Hello There!
I am sorry to hear about that. Many assume that social security is not taxable, but if your income is over a certain threashold, up to 80% of it could be taxable. If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you must pay federal income taxes on your Social Security benefits. Below those thresholds, your benefits are not taxed. That applies to spousal benefits, survivor benefits and Social Security Disability Insurance (SSDI) as well as to retirement benefits.
The portion of your benefits subject to taxation varies with income level. You’ll be taxed on:
While we still have half the year left, you might consider using the TurboTax tax caster to see where you stand to avoid owing or making adjustments to your estimated tax payments. https://turbotax.intuit.com/tax-tools/.
Also, here is another way to determine how much of your Social Security Income to determine what may be taxable: https://www.ssa.gov/benefits/retirement/planner/taxes.html
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