[Bill14564]

Originally Posted by Boomer

CoachKandSportsguy,

You are right. Details do matter. So? What do you mean?

IRMAA is based on AGI. This is a good time of year to start thinking about IRMAA and doing something, if you can, to avoid crossing that threshold into higher Medicare costs. Some people will use QCDs to do that. Others might time when it is worth taking a capital gain.

As we know, IRMAA kicks in two years later, and the 2026 IRMAA numbers are not out yet, so all we can do is guess what 2026 will bill us for our Medicare based on 2024 AGI.

Sometimes there is no way to avoid IRMAA. I think it is especially unfair to single people. Married couples get a lot more room to maneuver their AGI to avoid IRMAA.

Altavia is correct in spotting the possible need for the OP to try to factor in IRMAA. Whether that is the reason for the OP's question is not clear. But being aware of IRMAA now and planning to stay below the threshold can save a lot of money -- two years from now.

Altavia is also right in saying to look into Roth conversions if under RMD age. Check those tax brackets and do it if you can.

To those who commented that it's too early -- Nope!

Boomer (who is not an accountant)

Focus on the question that was asked. The OP asked about results obtained from HR Block software regarding his marginal tax rate and overall tax burden. It is too early to consider 2024 when answering the question that was asked. 2024 overall tax burden cannot yet be determined and the HR Block software for 2024 is not available yet. It is too early for the answer to that question to have anything to do with 2024 tax brackets.

The discussion about IRMAA, RMD, Roth, 2024 tax brackets, and 2026 payments is interesting but not applicable to the question being answered.

[CoachKandSportsguy]

Originally Posted by Bill14564

Focus on the question that was asked. The OP asked about results obtained from HR Block software regarding his marginal tax rate and overall tax burden. It is too early to consider 2024 when answering the question that was asked. 2024 overall tax burden cannot yet be determined and the HR Block software for 2024 is not available yet. It is too early for the answer to that question to have anything to do with 2024 tax brackets.

The discussion about IRMAA, RMD, Roth, 2024 tax brackets, and 2026 payments is interesting but not applicable to the question being answered.

Maybe, if the person was using the software to figure out if he needed to send in additional taxes because his withholding was too low, then it's appropriate using even 2023 tax tables. If there is a large gap, there are small penalties. Otherwise I agree.

[Altavia]

Originally Posted by Boomer

CoachKandSportsguy,

You are right. Details do matter. So? What do you mean?

IRMAA is based on AGI. This is a good time of year to start thinking about IRMAA and doing something, if you can, to avoid crossing that threshold into higher Medicare costs. Some people will use QCDs to do that. Others might time when it is worth taking a capital gain.

As we know, IRMAA kicks in two years later, and the 2026 IRMAA numbers are not out yet, so all we can do is guess what 2026 will bill us for our Medicare based on 2024 AGI.

Sometimes there is no way to avoid IRMAA. I think it is especially unfair to single people. Married couples get a lot more room to maneuver their AGI to avoid IRMAA.

Altavia is correct in spotting the possible need for the OP to try to factor in IRMAA. Whether that is the reason for the OP's question is not clear. But being aware of IRMAA now and planning to stay below the threshold can save a lot of money -- two years from now.

Altavia is also right in saying to look into Roth conversions if under RMD age. Check those tax brackets and do it if you can.

To those who commented that it's too early -- Nope!

Boomer (who is not an accountant)

From my perspective, if someone is not aware of how the progressive income tax structure works, seems likely are other factors impacting their taxes that have been overlooked.

Getting professional help is probably the best advise given here.

[Ellwoodrick]

Not on topic but if you had a windfall year and then dropped back down the following year can you appeal the IRMMA rate?

[MikeN]

Ask a tax professional, not an online forum

[Pat2015]

Most people know what their monthly income is so it’s easy to estimate taxes. What you don’t want to do is take an IRA/401k withdrawal (unless forced to with RMD’s) in the last quarter and find that’s pushed you into a higher tax bracket.

[Pat2015]

Originally Posted by Ellwoodrick

Not on topic but if you had a windfall year and then dropped back down the following year can you appeal the IRMMA rate?

I know several people who have succcessfully done that.

[CoachKandSportsguy]

Originally Posted by MikeN

Ask a tax professional, not an online forum

for such a simple question, really?
its just mafs and all in the public domain.

asking a question is not like filing a return. .

[Pat2015]

Originally Posted by JamesD

"It's too early to be calculating taxes for 2024"

Wow!

Everything else spot on.

Never too early in the year to calculate/estimate taxes as some pay taxes quarterly to avoid tax penalties, and it’s good to plan withdrawals from taxable accts to watch out/prepare for additional charges for Medicare, and potentially an uptick in SS taxes.

[Carlsondm]

Originally Posted by Bill14564

The OP mentioned his total tax owed. Since 2024 is not complete, he could not be calculating his total tax owed for 2024. More, if he is attempting to calculate his 2024 taxes and is in the 22% bracket by early September then he will owe more than 15% by the time the year is over. Plus, he said he was using the HR Block software but the software for 2024 taxes has not been released yet.

So what was the exclamation, "Wow!" about?

Some of us call it “tax planning”. Usually we start in 0ctober.

[retiredguy123]

Note that if you pay your taxes quarterly, there is a specific quarterly amount that you can pay, based on your prior year taxes, that will guarantee that you will not owe a penalty the following year. For most people, this is the "total tax" amount on the Form 1040 divided by 4. For high income people, this amount can be slightly higher. If you use this method, no tax planning to make up a shortfall is required.

[bragones]

Originally Posted by MikeN

Ask a tax professional, not an online forum

Why? There's been some good info to digest in this thread.

[nn0wheremann]

Originally Posted by roob1

My taxable income fell in 22% bracket. Yet HR Block tax software indicated my total tax owed at about 15% of my taxable income. I took the standard deduction only. What am I missing?

Only a portion of your taxable income was in each bracket, 11%, and 22%. So, the average of the portion in each bracket was the stated percentage.

[Stu from NYC]

Originally Posted by bragones

Why? There's been some good info to digest in this thread.

Very true but is all of this good info, accurate?

[Haggar]

Originally Posted by JamesD

"It's too early to be calculating taxes for 2024"

Wow!

Everything else spot on.

As an active CPA I tax plan for the next year for my clients when we finish the return for the prior year. Basing estimated payments om prior year income to eliminate penalties and interest is fine for some but for some of my clients they want more info on their next year. Taxable events may change, higher or lower interest income because of changing interest rates, starting to receive social security, RMD's, sale of assets, sale of a business, etc all affect the next year projection. It's important to pay enough estimated taxes but it's also important not to overpay or know what the balance next April 15 will be in addition to the estimates required.

My compliments to many of the posters for answering the OP accurately.