We have had the 2024 tax program installed since last November, and have been inputting information since then, but today is the first time that we have run through all the preliminary data prior to getting the last of the IRS 1099 forms from our various Government and financial institutions.
I have put together a spreadsheet for each tax year which does many of the major calculations for the tax year with educated guesses and actual numbers. The form has several functions including a calculator for our Required Minimum Distribution (RMD) from the retirement savings. That particular function, each year, establishes the RMD as soon as I input the year end savings balance and the and age factors, which are used to calculate the actual RMD amount. That way, I can set up the periodic withdrawals to be made for the year which usually amount to within pennies of the required amount. We’ve already received the January withdrawal.
As I have said in earlier posts about this topic, I like to set things up such that the amount in the refund or amount owed are a small value. I don’t like loaning the government interest-free money. This year, it appears, we will be getting a refund a little further away from zero than we would prefer. We did the withholding based on the expected standard deduction and our effective tax rate from last year, but the IRS increased the standard deduction figure which displaced us a bit from the target we set. Oh well, we will do the usual and place the refund in long-term savings investment.
So, now all we have to do is wait for the last of the expected 1099s to become available on or about the 29th of this month (January), and run the missing numbers for which approximations have been used thus far. Then, we will e-file the returns at the end of January or the beginning of February.