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When I filed my 2020 taxes, I realized how good/bad I did with my tax projections....

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  • Cubicle
    replied
    Federal refund >$16,000.
    State refund >$4,000

    Not filled yet, just started this week.

    Covid... Did experience a big drop. Now I'm digging super hard to get deductions & credits I haven't qualified for in years. Making less money has it's perks I must say.
    ​​​​​

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  • CordMcNally
    replied
    Originally posted by pistolpete View Post
    My income went up a little more than expected in 2020. I’m using the 110% safe harbor rule. I owe $35000 federal and $7000 state. Glad I’m not a big spender and can pay it all comfortably, but dang, paying 42k to the government, not including first quarter estimated taxes in a month stings!
    I bet a majority of people who are expecting refunds would be happy to trade places!

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  • Peds
    replied
    just a reminder: i just updated our W4 as the quarter is ending.

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  • BruinBones
    replied
    I was fortunate enough to FIRE mid-2020. I grossly overestimated witholdings because in 2019 we owed several thousand in taxes and in 2020 we were refunded several thousand.

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  • JBME
    replied
    I am not assuming that. I'd stay tuned to your local politicians to see if that's the case. I owe money to my state too. grr

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  • Lithium
    replied
    Is it pretty safe to assume that most states will extend deadlines a month also? My entire state income tax balance is due on 4/15, wouldn’t mind putting that off a little longer.

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  • JBME
    replied
    well I haven't heard anything about when Q1 estimated taxes are...I assume that's still April. So at least you can delay the $42k payment another month if need be

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  • pistolpete
    replied
    My income went up a little more than expected in 2020. I’m using the 110% safe harbor rule. I owe $35000 federal and $7000 state. Glad I’m not a big spender and can pay it all comfortably, but dang, paying 42k to the government, not including first quarter estimated taxes in a month stings!

    Leave a comment:


  • JBME
    replied
    Last year I paid my taxes almost right away. I try not to procrastinate on things. We ended up getting the short end of the stick because then COVID happened and the filing deadline was moved all the way to July, and we owed money, so at minimum that money could have sat in a savings account earning interest all those months.

    This year I found we owed a few thousand again. Ever since, I've held off just because I didn't want to send the payment yet until we finish refinancing and the dust settles from that. Looks like we come out a "winner" this time around since the filing deadline is about to be moved to May 17 rather than April 15. woohoo! first world problem...

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  • Larry Ragman
    replied
    Well, Robin Hood (the archer, not the trading company) I ain’t. Just did my first pass and looks like I’ll owe ~$10k federal, $3k state. Not really an issue since I paid a ton of taxes already and don’t think I’ll owe a penalty. I actually tried to get a bit closer to the mark with some voluntary additional withholding, but as it happened my side gig and first time deferred comp vesting both drove the income (and taxes) up quite a bit. I’ll wait to file until the first week of April or so since no point writing a check too soon.

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  • Lithium
    replied
    This is the first year I am trying to get a big refund. The reason is because I want to invest another $5k in ibonds. So I intentionally overpaid by $10k. I gave myself an extra cushion in case my estimated taxes were off (and it looks like they probably were, though an extra $5k should more than cover it). I wonder if I am going to regret that, based on how slow the IRS has been in processing returns.

    I think I still have one 1099-DIV out there plus a couple of K-1’s still in the ether.

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  • billy
    replied
    Originally posted by TheDangerZone View Post
    Our brokerage 1099 from Vanguard was posted a week or two ago. I got notice that my federal return was accepted yesterday.

    Due to DAF contributions last February and TLH, we itemized this year and are getting a big federal refund.

    In a typical year, we get a few grand back. I guess I am risk adverse and would rather get a refund than risk penalties. I don't personally feel that a few grand in an "interest free" loan to the government moves the needle much for me. At least not enough to monitor W4 calculators and adjust withholding with HR through the course of the year.

    Disclaimer: I actually am not sure how harsh those penalties are or how egregious I would have to mess up to even be subjected to one.
    You can read up on safe harbor rules. If youre a w2 high earner, basically you can pay 110% of last years taxes and be in the safe harbor, or 90% of the current taxes due.

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  • TheDangerZone
    replied
    Our brokerage 1099 from Vanguard was posted a week or two ago. I got notice that my federal return was accepted yesterday.

    Due to DAF contributions last February and TLH, we itemized this year and are getting a big federal refund.

    In a typical year, we get a few grand back. I guess I am risk adverse and would rather get a refund than risk penalties. I don't personally feel that a few grand in an "interest free" loan to the government moves the needle much for me. At least not enough to monitor W4 calculators and adjust withholding with HR through the course of the year.

    Disclaimer: I actually am not sure how harsh those penalties are or how egregious I would have to mess up to even be subjected to one.

    Leave a comment:


  • Lordosis
    replied
    I am also still waiting on vanguard. :/
    ​​​​​

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  • MPMD
    replied
    we paid way too much.

    always hard b/c my wife and i are both high earners with relatively unpredictable final incomes (extra calls, extra shifts, RVU components). i am actually surprised that we over-withheld so much but c'est la vie.

    i definitely gave the gov't a large loan this year, biggest ever.

    my goal is usually for my +/- to be <2% of our AGI and i'm usually there.

    that said, likely that we'll make a bit more in 2021 (full year of RVU for DW) so i think i'm going to let it ride. but yeah this year i'm going to be acting like a much less financially savvy person and celebrating my big check from the IRS.

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