Money and Business

2023 Tax Preparation Now Complete

UPDATE: 02/01/2024 — Not a record, but the small refund hit the bank account today. So the 2023 tax season is now officially concluded and we can now devote our energies elsewhere.

Well, it’s all over but the reimbursement as far as the 2023 Tax Season is concerned. We obtained (electronically) all the necessary financial reports and have concluded the preparation of our submissions to the collective thievery of the US Internal Revenue Service and the Arizona State Department of Revenue (ADOR).

As I posted earlier this month, I have a spreadsheet that allows us to forecast our financial numbers with regard to the Tax Reporting cycle. There is a little guesswork, but the initial guesses usually get us within a few dollars of the final figures. This year was no exception and when the 2023 1099s and other forms were available, it was just a matter of “tuning up” the tax program. We’re now ready to file when the IRS and ADOR open up for the 2024 tax reporting season. The Feds will be accepting inputs next Monday 01/29/2024; I’m not sure when ADOR will be open for business, but it’s of little consequence since there is neither a refund nor tax due.

We will be getting our usual small refund from the IRS. Last year, the IRS had our refund in the bank account a mere three days after we filed. Since we’re filing early, maybe we’ll be as lucky again.

2024 Financial Forecast Tools

I usually start setting up for the next years’ financial considerations in late November which was the case this past (2023) November. I have a spreadsheet that I have developed (and continue to develop as things are dynamic to an extent) which allows me to do several things to manage our money:

  1. Forecast Gross Income
  2. Forecast IRA Required Minimum Distribution (RMD)
  3. Forecast Federal Tax Withholding Rate
  4. Forecast Taxable Portion of Social Security Income
  5. Forecast IRS Adjusted Gross Income
  6. Forecast Effective IRS Tax Rate Percentage
  7. Forecasts for Dividends, Capital Gains, etc.

The year-end use of this tool allowed me to prepare our 2023 IRS Tax in advance of the receipt of tax forms from financial institutions, etc. It also allowed me to forecast (to within a penny, as it turns out) the amount of my IRA that I must take as a distribution in 2024.

Inputs to the spreadsheet come from several sources. Forecast income numbers come from pension plans, investment brokerages and the Social Security Administration. These turn out to be actual numbers while other income items are based on past experience with the sources and our knowledge of how those numbers are likely to increase (or decrease). The latter aren’t usually nailed down until the end of the year.

The first important item that I calculate from the tool is the RMD forecast which allows me to set up the distribution schedule and amounts for my IRA. It also allows me to set the Federal Withholding amount for the coming year.

The second important item would be is to use the numbers from last year to prepare our 2023 IRS Income Tax in advance of receipt of the 1099-R and other IRS forms. We’re pretty confident that we know the approximate amount of our tax refund which we expect to get back from the .gov in February. As usual, it seems to be a relatively small refund which means we didn’t allow the Fed to enjoy having a lot of our money interest free for the year.

Happy 2024

Ringing in the new and ringing out the old. So long 2023.

We continue to be in good health. We both got annual eye exams in October and new eyeglasses were issued. Our prescriptions haven’t changed in the last several years but we both needed new eyewear since the old ones were scratched and getting worn out. I have my usual visits with the specialists and there was nothing to worry about save for a few skin lesions (some were cancer) which the dermatologist removed.

Over the last few weeks, we did a first cut at the 2023 taxes and no surprises. It looks like we’ll be getting a small refund. We also calculated the 2024 Required Minimum distribution for the IRA, and it will increase a bit since the IRA fund did better these last few months. Damsel also switched her Social Security on for the coming year and we will be getting a modest increase in benefits which is completely offset by the current ruination of the Nation’s economy.

Over the last several years, we have seen relentless attacks on our God-given rights as guaranteed by the Second Amendment. We continue to monitor our favorite You-Tube® Pro-2A channels and the Pro-2A blogs to stay informed about the state of gun-grabbers efforts.

So that’s it for our New Year’s message. We’re wishing you good health and providence from The Almighty in the coming year. God Bless!

2022 Tax Season Mostly Over

UPDATE 01/27/2023

I snail mailed the AZ return yesterday as I said I might. However, AMAZINGLY, after only three days since e-filing, the Federal Refund is already in the Bank Account today – a record for sure. Something is to be said about filing early.

Confirmation Flag

Well, we just received our last 2022 1099-DIV from the broker and we entered the last of the data into the tax program. We validated the return and promptly e-filed with the IRS today.

It seems to always be that we wait on the broker for the last tidbit of income information to arrive in late January or early February. We have had all the other figures already plugged into the tax program only waiting for the last 1099-DIV to show up. The e-forms posted on the brokers website this afternoon.

So, as mentioned above, we e-filed this afternoon and within an hour had the confirmation flag email shown above. If things go as they did last year, we should have our small refund e-deposited within three weeks or so.

We were unable to file with the State of Arizona, however, since the main tax form 140 is not yet available in its final revision. Since we have neither a tax refund nor tax due with AZ, that filing can wait. The updated form is estimated to be available later this week. Since there is no refund, I think I will save myself the $20 and just print out and file the state return via snail mail rather than e-file.

Ringing in the New Year …

… and ringing out the old. So long 2022 – It’s been — weird.

But not all was bad in 2022 — we’re in good health and have been this year save for a major scare when Damsel got a mass report on this year’s mammogram — fortunately, the results of a biopsy (not fun) was benign calcification. My checkups with the urologist, the ophthalmologist, the nephrologist and dermatologist were business as usual with no complications.

Over the last few weeks, we did a first cut at the 2022 taxes and no surprises. It looks like we’ll be getting a small refund. We also calculated the 2023 Required Minimum distribution for the IRA — the new RMD will be down due to dramatic market loss in the IRA in 2022. That, and the Social Security cost of living adjustment is far less than might be necessary to offset Biden’s disastrous economy. It will be tight, but we’re going to be OK.

Over the last two years, we have seen relentless attacks on our God-given rights as guaranteed by the 2nd Amendment. New gun control has been enacted thanks to the Marxist Democrats and a few spineless RINOs. The NYSRPA v Bruen decision by the Supreme Court of the US is a help but states and courts are still ignoring it – be ready to fight in ’23.

So that’s it for our New Year’s message. We’re wishing you good health and providence from The Almighty in the coming year. God Bless!

Almost Done! – 2021 Tax Return

UPDATE: Filed 01/26/2022

I used strikeout tags above on the “Almost” in the title because we’re now filed and waiting for the refund.

UPDATE 2: Refund deposited 02/03/2022

This is the fastest we have ever seen a refund deposited. It took the IRS only eight out of the advertised 21 days to deposit our refund. Last year, we similarly filed our return in late January and it took the IRS 23 days before the refund showed up.

The current tax season will soon be over for us since we are completely done with everything except for one consolidated 1099 form from our brokerage; this investment account is always last for some reason, but it has previously been in our (electronic) possession before January is over. We’re expecting it to be available next week. We get a handful of 1099s from several sources including IRA RMD, SSA, pensions and financial institutions. Everything is already input to this year’s tax program except for the one mentioned above.

When the IRS changed the standard deduction under President Trump to be greater than our usual itemized deductions, it made our return so much easier to manage, given our financial particulars. We almost used to be like the dude in the photo on the left, but now we’re relieved of all that tedium under the revised standard deduction. We were happy to see that the current administration left things intact (albeit futzing around with other IRS functions). After we receive that last 1099 form, we will then be just a few clicks away from filing. This year, we are happy to say, that we analyzed our tax situation early and managed our withholding such that we will be receiving a small refund (<1K) from the Feds and, because of our charitable support for Arizona Private Education, we will be paying no state income tax at all.

Started the Annual IRS Ritual Today

I usually make it a point to acquire the Tax Software when Black Friday rolls around. This year was no exception and, since it is already the first of December, I roughed out the first cut of the 2021 return for the Fed (the Arizona package has yet to be released). I do this advanced cut each year to check if we have any unexpected issues that need to be fixed. At first glance, it appears that we do not have that need.

For the past several years, I have modeled our income and withholding on a spreadsheet to determine how much we must withhold for the Fed. So far, it has worked out to get us into a position where we only contribute minimally to the Fed and get a small (usually less than $1k) refund. We hate loaning the .gov interest free money.

I have updated the spreadsheet for 2022 already, since we now know the amount of SSA income for both of us. They allowed a 5.9% cost-of-living increase, but at the same time upped the Medicare Part B premium by 14.5%. The forecast for next year will put us in roughly the same bracket for 2021. Some items are guesses, but the major income sources (pension, SSA, IRA RMD) are well known.

We don’t pay any State Income Tax because we participate in a program to contribute to our local private Christian school which offsets us dollar-for-dollar on what would have been our State Tax obligation. We get the same kickback when we donate to the local high school’s Rifle Team! A bonus is that we still can claim each donation as a 501(c)(3) deduction on the Fed Tax.

We should again be able to file with the IRS in late January, as we did for last year’s return. The last and slowest of the 1099 forms from our investments are usually in our possession by then.