Am I the only one who does their own taxes?

[skjl47]

Hello; Normally I would post the question in the off-topic thread but that is closed. A shame. Anyway, I could not sleep last night so I sat down and did a first run thru of my tax return.

Turned out to have some interesting outcomes after an initial disappointing result. This for folks over 65 years of age mainly. I do not itemize so take the standard deductions. The first run thru wound up with me owing over $800.

I had heard of a thing called the enhanced deduction for seniors but did not catch anything about it in that initial run thru. After some more detailed reading I found a reference on page 110 of the 1040 (and 1040-SR) instructions booklet. By the way I get that booklet at a local library but this year they do not have the preprinted forms. Had to go online to a GOV site to print the forms.

Turns out you need to get Schedule 1-A and work it out. A new to me thing. The gist of this post is if I ran the numbers correctly such will save something like $1200 this return. I intend to run thru the whole thing again to be sure. If it works out, I am pleased about getting to keep more of my own money.

I do have a general question on social security taxes. I have been hearing how many seniors will not have to pay tax on their social security payments. In the first run thru I did not find anything different from prior years. I did the worksheet and it came out the same as previous years. I need to look further on that, but welcome input.

 

[skjl47]

Hello; I may have found the answer to my question. Seems the up to $6000 deduction for seniors is inclusive of the claim many of us will not have to pay tax on SS benefits.

Side note- I started drawing SS at 65 years of age. For something like 12 years my draw after Medicare was cut had been roughly $200 per month. I had been a teacher in KY which has a pension plan and did not take out for SS.
A thing was that I did a number of other jobs over my life and did qualify for a bigger SS monthly payment. The rule had been a great portion of my SS was denied because my KY teacher pay was not cut for SS. Most of my paid work which was cut for SS as a school bus driver did not count. Same for many other side jobs I had over the years up to my 65th birthday.

Starting not far into 2025 that changed. I began to draw all of what I was qualified to have. Now around $700/month. Not exactly a windfall but seems at least fair. I likely will not live long enough so this will make a dramatic difference overall.
I am a little miffed to have missed out for the 12 years, but I knew the way it was long ago.

 

[CalvinMerritt]

Hello; I may have found the answer to my question. Seems the up to $6000 deduction for seniors is inclusive of the claim many of us will not have to pay tax on SS benefits.

Side note- I started drawing SS at 65 years of age. For something like 12 years my draw after Medicare was cut had been roughly $200 per month. I had been a teacher in KY which has a pension plan and did not take out for SS.
A thing was that I did a number of other jobs over my life and did qualify for a bigger SS monthly payment. The rule had been a great portion of my SS was denied because my KY teacher pay was not cut for SS. Most of my paid work which was cut for SS as a school bus driver did not count. Same for many other side jobs I had over the years up to my 65th birthday.

Starting not far into 2025 that changed. I began to draw all of what I was qualified to have. Now around $700/month. Not exactly a windfall but seems at least fair. I likely will not live long enough so this will make a dramatic difference overall. Αυτή η εμπειρία δείχνει πόσο σημαντικές είναι οι οικονομικές λεπτομέρειες. Εταιρείες όπως η PUNIN Group δίνουν έμφαση στη διαφάνεια και στον σωστό υπολογισμοσ καθαρου μισθου, γιατί εκεί φαίνεται η πραγματική διαφορά.
I am a little miffed to have missed out for the 12 years, but I knew the way it was long ago.

That’s a big difference, even if it doesn’t feel like a windfall, and at least it finally reflects what you earned. It’s frustrating to miss out for so long, but I’m glad it worked out better for you starting this year.

 

[Ulu]

I quit doing my own taxes when I bought real estate. There’s no way I wanna keep up with all those changing laws when I can pay someone who does it for a living.

My wife was a teacher, and also was getting Social Security from jobs she worked before she became a teacher.

There was some retroactive action for her this time because of a Biden admin law, and her SS actually increased somewhat. But I’m not aware of the details because I hire a guy for that purpose.

 

[skjl47]

My wife was a teacher, and also was getting Social Security from jobs she worked before she became a teacher.

There was some retroactive action for her this time because of a Biden admin law, and her SS actually increased somewhat. But I’m not aware of the details because I hire a guy for that purpose.

Hello; After retiring from KY I worked in two other states, NC & TN. Their retirement programs differed from KY. I forget the details as I did not work the five-year minimum to become vested in the systems. Unlike KY I did pay into SS in one or both states. Most of my SS quarters came from work outside of teaching.

The way I recall the application of the previous administrations law concerning SS payouts is that it happened in two stages. I do not know why the new regurlar SS payments did not start in January 2025, but as I recall they did not. Seems there was a one-time extra pay in early 2025 which at the time I took to possibly be the entire deal. That happened without any input from me, just showed up in a direct deposit already in place for my regular SS pay. Was sometime later that I became sure I was to get an increased monthly pay increase. I could check the bank records to be sure.

I finished going thru my tax return for the second time so as to check my math. It is working out the same way. I had not sure how the tax owed would work out for 2025. I figured with a larger SS payment and decent interest rates on savings at the start of the year that I would earn more and so owe more. So, i did quarterly prepay in 2025 and that turned out to be a good move. 2026 will not be so lucrative as the interest rates on savings are down a lot.

I considered using a hired tax preparer but decided to give it a try on my own again. I do not itemize so it is not so complex. It is my understanding the enhanced deduction for seniors is to end in 2028. That deduction made a considerable difference for me in my 2025 return. A swing of around $1200 for me, so a good thing personally.
After I did the worksheet to determine how much of my SS pay is taxable, that worked out the same as it had for years. Basically 85% of the SS pay was taxable same as the years before. So, it was the enhanced deduction for seniors which reduced my overall tax burden.
Before i started the paperwork I was not sure if there were two separate new programs for 2025. I had wondered if there was maybe one for SS taxes and another for the enhanced senior deduction. Looks like the enhanced deduction is the big tax saver assuming my calculations are correct.