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I recently came across the tax estimation tools page on the Bogleheads Wiki. I found the information and links useful and think it is likely that other HumbleDollar readers will also.
It was interesting to me to learn to that the AARP free tax calculator that I often use appears to be a licensed version of the current Dinkytown program referenced in the Wiki article with the Dinkytown version being updated more frequently and thus the Boglehead’s recommend over the licensed versions. As of yesterday the software has not yet been updated for the 2025 OBBBA tax law changes. I have read that may be coming at the end of September. You can also use the tax estimator at the developer’s website for free. Lot’s of other useful free financial calculators also at Dinkytown.
For those who like excel spreadsheets there is also one to download from a different developer that has been updated for OBBBA already. I have downloaded but I have not yet dug into the program that but it appears to be comprehensive.
I hope you find this to be a useful reference.
Best, Bill
I tried the Dinkytown app and it seems insufficient to do my estimates. I have been deep into 2025 Excel1040. It seems to have many features that I was looking for but it is missing at least one form (8995-A) that I need. I tried to email the author but the emails bounce back as undeliverable. Thanks for sharing the link but my quest continues.
The Qualified Business Income Deduction (form 8995-A or 8995) is a great example of tax code complexity that was stacked on top of already existing complexity.
For me, unless my current year taxable income is significantly less than my prior year taxable income, I prefer to base my current year withholding and/or estimated tax payments on the available prior year tax amount safe harbor amount.
I expect I will be overpaid in 2025 because my initial planning did not include the new senior deduction that became law with the signing of the OBBBA on July 4, 2025. Is congress done with tax code changes for 2025? I do not know that answer any more than I know where stock prices will be at the end of the year.
I also use the tax planning tools to try to hit the taxable income level I want to hit to avoid wasting lower income tax brackets. With my current income level and type of income either of the referenced tax estimation tools currently work well for my tax planning and estimated tax payments purposes. You are correct in my thinking to seek the best tools if your taxes are currently complex and that amount is material to your decision making.
Good luck on your 2025 tax planning.
Best, Bill
Until last year I never bothered to do tax calculations, but since we retired our income is nowhere near the top of the 12%, nor the 10% brackets. However I did start doing manual calculations when I started performing Roth conversions last year to make sure we hit the top of the 12% bracket. I was a few hundred off. Did the calculations last month with research and the calculator on my phone, then doubled checked my math and research with my nephew who is an accountant, and again was spot on. I like the mental challenge of doing the research and calculations myself. But like Reagan dealing with Gorbachev, I trust (myself), but verify.
David, similar approach here for Roth conversions but I use an Excel spreadsheet because of some minimal self-employment income and tax calculations and my “threshold” is max income without losing the OBBB $12K senior deduction. It bleeds a bit over into the 22% bracket but not much. No nephew to check my work but I’m a reformed accountant from many years ago so I have only myself to blame if I screw it up. :0