Due to an upcoming change in income status, we started to review our 2019 and 2020 Income Tax situation. It seems that Damsel will now begin getting back some of her hard-earned money that the .gov stole from her while she was working. I know, there are laws that congress passed that made the removal of money from our earnings “legal” under the Social Security Act or whatever. Still, we as individuals would be better off if we had access to those funds to properly invest and not have them deferred for some of the ridiculous spending by congress. It is tantamount to theft in our opinion.
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OK – now that I have that out of my system, I can expound on the tax prep thing. It seems that if we have Damsel’s SSA distributions coming into the household, I have to make adjustments to some things, like withholding and IRA distribution rate. This is to be done in order to attempt to keep us in the current tax brackets and such.
Since the new income will start later this year, I had to analyze whether it would be prudent to make adjustments to those things I mentioned above. Fortunately, for this tax year, that won’t be necessary. It may cause us to owe a little more for 2019, but, as I have said before, we would rather owe a bit than loan the .gov interest free money.
Because of our retirement lifestyle, we set our income rate to accommodate our established needs. Now, because of the increase in available funds, I can reduce the IRA withdrawal rate to the RMD (required minimum distribution) as set by the IRS for retirement accounts. This is a good thing thus preserving those funds for the future while they multiply in our IRA investment pool.
So, until I see some of the exact numbers forthcoming, I have set up a spreadsheet with preliminary numbers to analyze our 2020 income and withholding situation. At first glance, it looks like we’re going to be getting our 2020 tax situation under control. We will fine tune things as soon as the actual numbers can be seen.