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.
Because the tax program we use was a little tardy in getting all the appropriate updates (and some are still not ready) we are getting a later start than usual on the preparation of our annual tax returns. We know most of the numbers such that we can input them to the tax program to get a fairly close approximation of the actual bottom line for the tax year. According to early results, we seem to be getting a larger chunk of change than originally forecast for a couple of reasons; first, the entirety of the .gov “COVID Stimulus” went to charitable organizations which was above and beyond and in addition to our normal 501(c)(3) contributions. The second reason for the larger rebate is we decided to itemize some deductions that were to occur in 2021 by paying them in 2020. That got us to where our itemized deductions exceeded the generous standard deduction introduced by the Trump administration by a couple of thousand dollars which resulted in several more hundred dollars coming back to us.
Earlier than anticipated, the last important 1099 document became available today. I expected at least two more weeks before the investment consolidated 1099 would be available. But, since I reported being 
As of today, I can say that the 2019 returns are about complete. All we’re waiting for is the final 1099s from investments, retirement, etc. One such investment 1099 won’t be available until the second week in February, so we will have to wait another month for that little (very minor) tidbit of fiscal information.
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.
Well, maybe we’re not really hard over on getting the tax return for 2018 in the works just yet. We did, however, get our 2018 copy of the tax program we use and installed it on the laptop.