Doing a right click on the AARP website 1040 calculator I see "KJE" the computer company everywhere in the code which is the company that developed, maintains and leases the Dinkytown 1040 tool. I think I remember in the past a disappearing popup on the AARP tool stating that Dinkytown was the source but I no longer find that reference. I know just enough about coding to be dangerous. I hope Dinkytown will be around as long as I am around. I agree they are likely just different versions of the same software.
On the non itemized charitable deduction I do not expect any change on the final form compared with the current draft form. Given that we have a midterm national election before the end of the year and then a congress with lame duck representatives changes are always possible that could cause form changes. For the sake of certainty I hope the final version of the 2026 1040 is available in a timely manner so that all of us, taxpayers, tax preparers, tax software developers and the Internal Revenue Service can do our own part in this complex system.
I agree with Rick and the conclusion that for a non itemized return the $1K/$2K (single / MFJ) 2026 charitable deduction is below the line. That is how I currently have the expense in our 2026 planned return. Here is a link to the IRS draft of the 2026 form 1040. The line 12f currently shows the IRS's thinking is that deduction is below the line.
There are some situations and events when a IRS form 709 is required even when gifts are less than the annual exclusion amount. See the IRS 2025 709 instructions- Who Must File-In general. If you are a citizen or resident of the United States,you must file a gift tax return (whether or not any tax is ultimatelydue) in the following situations.• If you gave gifts to someone in 2025 totaling more than$19,000 (other than to your spouse), you must generally fileForm 709. But see Transfers Not Subject to the Gift Tax andGifts to Your Spouse, later, for more information on specificgifts that are not taxable.• Certain gifts, called future interests, are not subject to the$19,000 annual exclusion and you must file Form 709 even ifthe gift was under $19,000. See Annual Exclusion, later.• Spouses may not file a joint gift tax return. Each individual isresponsible to file a Form 709.• You must file a gift tax return to split gifts with your spouse(regardless of their amount) as described in Part III Spouse’sConsent on Gifts to Third Parties, later.• If a gift is of community property, it is considered madeone-half by each spouse. For example, a gift of $100,000 ofcommunity property is considered a gift of $50,000 made byeach spouse, and each spouse must file a gift tax return.• Likewise, each spouse must file a gift tax return if they havemade a gift of property held by them as joint tenants ortenants by the entirety.• Only individuals are required to file gift tax returns. If a trust,estate, partnership, or corporation makes a gift, theindividual beneficiaries, partners, or stockholders areconsidered donors and may be liable for the gift and GSTtaxes.• The donor is responsible for paying the gift tax. However, ifthe donor does not pay the tax, the person receiving the giftmay have to pay the tax.• If a donor dies before filing a return, the donor’s executormust file the return.Who does not need to file.If you meet all of the following requirements, you are not required to file Form 709.• You made no gifts during the year to your spouse.• You did not give more than $19,000 to any one donee.• All the gifts you made were of present interests. I would also note a few administrative headaches and considerations related to gifts and gift tax returns-
Once you file a 709 using any part of your lifetime exclusion amount the information from that year is then incorporated into any future year form 709 filing.
If you ever file a form 709 and upon death an estate form 706 is required or the personal representative (aka executor/executrix) of the estate decides to file an estate 706 then information from the last gift tax return form 706 will be needed to prepare estate form 706.
In 2026 we each have a current estate maximum exclusion of $15 million less the amount of taxable lifetime gifts above the annual exclusion. For the surviving spouse to have the current unified (combined taxable gift and estate) maximum $30 million lifetime estate 706 exemption then neither spouse could have made any taxable lifetime gifts. Further, for the surviving spouse to have a total $30 million lifetime exemption (including the deceased spouse's $15 million) a timely estate return for the first to die spouse must be filed and executor must elect to transfer the deceased spousal unused exclusion (DSUE) amount to the surviving spouse, regardless of the size of the decedent’s gross estate.
To avoid these issues most people strive to never make a taxable gift during life of a present interest gift above the annual gift exclusion amount that would require a filing of a federal gift tax return. Depending on where your domicile is you may also have state gift tax reporting obligations. If you as a surviving spouse expect your estate to be close to or above the current ($15M) exclusion then you may want to seek professional advice from someone with appropriate knowledge and experience in this area that will still be around when you are not. I hope this helps, Bill
My feedback- You may want to investigate the option of a Qualified Longevity Annuity Contract (QLAC) to defer a portion of your RMDs for one or both of you.
Here is a link to an archived AICPA 2014 article in The Tax Advisor when QLACs were first created which should give you an overview of how this type of annuity works. Much has changed since 2014 when QLACs became available. The decision to buy QLACs are complex and best benefit a small subset of (typically affluent with a high tax rate in retirement) people primarily to help participants hedge the risk of drawing down their benefits too quickly and thereby outliving their retirement savings (2012 Preamble to REG-115809-11). A really long life is the problem a QLAC is trying to solve. Note that in 2026 the maximum QLAC that each of you could purchase has increased to $210K. Prior premium purchase percentage limitations on QLAC purchases have been modified and I have no expertise on such matter. I have made the decision to not buy a QLAC but it is an option in planning for some. I hope this helps. I would be interested if anyone has experience with buying a QLAC or deciding not to. Bill
Here is a link to a AICPA 2013 archive article about the history of the basis reporting mandate passed in 2008 that became effective starting for basis of investments bought starting after 2010 that describes many of problems in the initial years. I actively worked preparing complex individual tax returns during this change over period and I agree electronic tracking of basis is much better now. But when something happens with basis tracking now the burden still falls on you, the taxpayer, to determine the basis. I would prefer to deal with just the basis on the handful of my individual purchases and not the basis on all of the dividend re-investments. When do things typically go wrong now regarding basis? My experience was the most frequent problems with basis occurred when-
a client changed brokers and the basis does not properly transfer to the new broker.
a client gifts shares to a family member and the basis is not available to the family member. Or the person receiving such a gift when the tax basis of the donor is greater than the FMV on the date of gift and the tax basis is then limited to the lower amount.
an investment fund you own fails and is merged into a new fund and the basis into the new fund did not transfer.
The shares were inherited in a non community property state and the calculation of the new basis is not available (think basis should be half original basis, half FMV at DOD).
The basis is not provided. No one knows why or what the basis is. Watch out for for entering group totals and one or more of the basis line items is blank.
If a person looks at their basis as shown on their broker statement prior to sale and the basis is there, then I would expect the broker tax report for the year will likely be reported correctly on their annual 1099-B tax form. If the basis is unknown on the reporting broker statement prior to the sale, typically blank, zero or N/A, then typically the broker tax statement assumes the basis is zero. Not the answer the taxpayer would prefer. If the manner your tax reporting is input into your personal return does not match what the IRS computer has received directly from your broker a letter from the IRS is likely. Usually a long while after your return has been filed. If your broker initial 1099-B warns you the information is preliminary that means a change is possible. I would often recommend extending filing the 1040 rather than having to amend the return due to changes in amounts on a subsequent amended consolidated 1099 from your broker. Some broker amended 1099-B forms will show the changes in bold or italic lettering. I hope my thoughts help.
Bill
Hi Andrew, When you write "I recently took one step, which, while very modest, does avoid the tax problem" I found myself nodding in agreement as I have recently turned off the automatic reinvestment of dividends in a tiny new equity position in our joint taxable account. My motivation in turning off the reinvestment is somewhat different than yours in that my primary goal is to simplify our tax basis record keeping by having dividends (mostly qualified) paid in cash to our settlement fund rather than being reinvested. I also am planning for this investment to hold any part of our future IRA RMDs that we do not currently plan to spend during our lifetime so our heirs should, hopefully, receive such assets without an embedded taxable gain. Such basis tracking may be less important to you as I believe you live in one of the community property states (Texas) where the surviving spouse, when first spouse dies, typically gets a step up (or down) basis adjustment to 100% of the fair market value as of the date date of death for assets in a taxable brokerage account. Texas seems to have some interesting provisions in their Estates Codes including one about a community property survivorship agreement (CPSA) that may impact tax decision making. As I do not live in Texas I will pass on trying to understand that law. Best, Bill
Thanks for your comment. A number of comments on Humble Dollar and other sites I read gives me pause about continuing to buy I Bonds. I have not had the administrative headaches you and others have had and I certainly do not want them for myself or my heirs. Converting my login at TD to ID.me is a distant secondary consideration on if I am willing to continue buying I Bonds if TD does not improve their customer service when something occurs for a person like you who has taken reasonable actions which are deemed to be insufficient.
Thanks John. Your forum article sent me hunting for more detail on the methodologies S&P Dow Jones indices use to maintain the index. Their hard work and professionalism certainly makes investing easier for me.
Comments
Thanks for your insightful comments from your life experience.
Post: The Security Money Can’t Buy
Link to comment from September 25, 2026
Doing a right click on the AARP website 1040 calculator I see "KJE" the computer company everywhere in the code which is the company that developed, maintains and leases the Dinkytown 1040 tool. I think I remember in the past a disappearing popup on the AARP tool stating that Dinkytown was the source but I no longer find that reference. I know just enough about coding to be dangerous. I hope Dinkytown will be around as long as I am around. I agree they are likely just different versions of the same software.
Post: Does the new-for-2026 $1000/$2000 charitable deduction for non-itemizers reduce AGI?
Link to comment from September 23, 2026
On the non itemized charitable deduction I do not expect any change on the final form compared with the current draft form. Given that we have a midterm national election before the end of the year and then a congress with lame duck representatives changes are always possible that could cause form changes. For the sake of certainty I hope the final version of the 2026 1040 is available in a timely manner so that all of us, taxpayers, tax preparers, tax software developers and the Internal Revenue Service can do our own part in this complex system.
Post: Does the new-for-2026 $1000/$2000 charitable deduction for non-itemizers reduce AGI?
Link to comment from September 22, 2026
I agree with Rick and the conclusion that for a non itemized return the $1K/$2K (single / MFJ) 2026 charitable deduction is below the line. That is how I currently have the expense in our 2026 planned return. Here is a link to the IRS draft of the 2026 form 1040. The line 12f currently shows the IRS's thinking is that deduction is below the line.
Post: Does the new-for-2026 $1000/$2000 charitable deduction for non-itemizers reduce AGI?
Link to comment from September 22, 2026
There are some situations and events when a IRS form 709 is required even when gifts are less than the annual exclusion amount. See the IRS 2025 709 instructions- Who Must File- In general. If you are a citizen or resident of the United States, you must file a gift tax return (whether or not any tax is ultimately due) in the following situations. • If you gave gifts to someone in 2025 totaling more than $19,000 (other than to your spouse), you must generally file Form 709. But see Transfers Not Subject to the Gift Tax and Gifts to Your Spouse, later, for more information on specific gifts that are not taxable. • Certain gifts, called future interests, are not subject to the $19,000 annual exclusion and you must file Form 709 even if the gift was under $19,000. See Annual Exclusion, later. • Spouses may not file a joint gift tax return. Each individual is responsible to file a Form 709. • You must file a gift tax return to split gifts with your spouse (regardless of their amount) as described in Part III Spouse’s Consent on Gifts to Third Parties, later. • If a gift is of community property, it is considered made one-half by each spouse. For example, a gift of $100,000 of community property is considered a gift of $50,000 made by each spouse, and each spouse must file a gift tax return. • Likewise, each spouse must file a gift tax return if they have made a gift of property held by them as joint tenants or tenants by the entirety. • Only individuals are required to file gift tax returns. If a trust, estate, partnership, or corporation makes a gift, the individual beneficiaries, partners, or stockholders are considered donors and may be liable for the gift and GST taxes. • The donor is responsible for paying the gift tax. However, if the donor does not pay the tax, the person receiving the gift may have to pay the tax. • If a donor dies before filing a return, the donor’s executor must file the return. Who does not need to file. If you meet all of the following requirements, you are not required to file Form 709. • You made no gifts during the year to your spouse. • You did not give more than $19,000 to any one donee. • All the gifts you made were of present interests. I would also note a few administrative headaches and considerations related to gifts and gift tax returns-
- Once you file a 709 using any part of your lifetime exclusion amount the information from that year is then incorporated into any future year form 709 filing.
- If you ever file a form 709 and upon death an estate form 706 is required or the personal representative (aka executor/executrix) of the estate decides to file an estate 706 then information from the last gift tax return form 706 will be needed to prepare estate form 706.
- In 2026 we each have a current estate maximum exclusion of $15 million less the amount of taxable lifetime gifts above the annual exclusion. For the surviving spouse to have the current unified (combined taxable gift and estate) maximum $30 million lifetime estate 706 exemption then neither spouse could have made any taxable lifetime gifts. Further, for the surviving spouse to have a total $30 million lifetime exemption (including the deceased spouse's $15 million) a timely estate return for the first to die spouse must be filed and executor must elect to transfer the deceased spousal unused exclusion (DSUE) amount to the surviving spouse, regardless of the size of the decedent’s gross estate.
To avoid these issues most people strive to never make a taxable gift during life of a present interest gift above the annual gift exclusion amount that would require a filing of a federal gift tax return. Depending on where your domicile is you may also have state gift tax reporting obligations. If you as a surviving spouse expect your estate to be close to or above the current ($15M) exclusion then you may want to seek professional advice from someone with appropriate knowledge and experience in this area that will still be around when you are not. I hope this helps, BillPost: Is a Roth conversion an optimal strategy in my situation?
Link to comment from September 20, 2026
My feedback-
You may want to investigate the option of a Qualified Longevity Annuity Contract (QLAC) to defer a portion of your RMDs for one or both of you. Here is a link to an archived AICPA 2014 article in The Tax Advisor when QLACs were first created which should give you an overview of how this type of annuity works. Much has changed since 2014 when QLACs became available. The decision to buy QLACs are complex and best benefit a small subset of (typically affluent with a high tax rate in retirement) people primarily to help participants hedge the risk of drawing down their benefits too quickly and thereby outliving their retirement savings (2012 Preamble to REG-115809-11). A really long life is the problem a QLAC is trying to solve. Note that in 2026 the maximum QLAC that each of you could purchase has increased to $210K. Prior premium purchase percentage limitations on QLAC purchases have been modified and I have no expertise on such matter. I have made the decision to not buy a QLAC but it is an option in planning for some. I hope this helps. I would be interested if anyone has experience with buying a QLAC or deciding not to. Bill
Post: Is a Roth conversion an optimal strategy in my situation?
Link to comment from September 19, 2026
Here is a link to a AICPA 2013 archive article about the history of the basis reporting mandate passed in 2008 that became effective starting for basis of investments bought starting after 2010 that describes many of problems in the initial years. I actively worked preparing complex individual tax returns during this change over period and I agree electronic tracking of basis is much better now. But when something happens with basis tracking now the burden still falls on you, the taxpayer, to determine the basis. I would prefer to deal with just the basis on the handful of my individual purchases and not the basis on all of the dividend re-investments. When do things typically go wrong now regarding basis? My experience was the most frequent problems with basis occurred when-
- a client changed brokers and the basis does not properly transfer to the new broker.
- a client gifts shares to a family member and the basis is not available to the family member. Or the person receiving such a gift when the tax basis of the donor is greater than the FMV on the date of gift and the tax basis is then limited to the lower amount.
- an investment fund you own fails and is merged into a new fund and the basis into the new fund did not transfer.
- The shares were inherited in a non community property state and the calculation of the new basis is not available (think basis should be half original basis, half FMV at DOD).
- The basis is not provided. No one knows why or what the basis is. Watch out for for entering group totals and one or more of the basis line items is blank.
If a person looks at their basis as shown on their broker statement prior to sale and the basis is there, then I would expect the broker tax report for the year will likely be reported correctly on their annual 1099-B tax form. If the basis is unknown on the reporting broker statement prior to the sale, typically blank, zero or N/A, then typically the broker tax statement assumes the basis is zero. Not the answer the taxpayer would prefer. If the manner your tax reporting is input into your personal return does not match what the IRS computer has received directly from your broker a letter from the IRS is likely. Usually a long while after your return has been filed. If your broker initial 1099-B warns you the information is preliminary that means a change is possible. I would often recommend extending filing the 1040 rather than having to amend the return due to changes in amounts on a subsequent amended consolidated 1099 from your broker. Some broker amended 1099-B forms will show the changes in bold or italic lettering. I hope my thoughts help. BillPost: Flipping the Script on Asset Allocation?
Link to comment from September 18, 2026
Hi Andrew, When you write "I recently took one step, which, while very modest, does avoid the tax problem" I found myself nodding in agreement as I have recently turned off the automatic reinvestment of dividends in a tiny new equity position in our joint taxable account. My motivation in turning off the reinvestment is somewhat different than yours in that my primary goal is to simplify our tax basis record keeping by having dividends (mostly qualified) paid in cash to our settlement fund rather than being reinvested. I also am planning for this investment to hold any part of our future IRA RMDs that we do not currently plan to spend during our lifetime so our heirs should, hopefully, receive such assets without an embedded taxable gain. Such basis tracking may be less important to you as I believe you live in one of the community property states (Texas) where the surviving spouse, when first spouse dies, typically gets a step up (or down) basis adjustment to 100% of the fair market value as of the date date of death for assets in a taxable brokerage account. Texas seems to have some interesting provisions in their Estates Codes including one about a community property survivorship agreement (CPSA) that may impact tax decision making. As I do not live in Texas I will pass on trying to understand that law. Best, Bill
Post: Flipping the Script on Asset Allocation?
Link to comment from September 18, 2026
Thanks for your comment. A number of comments on Humble Dollar and other sites I read gives me pause about continuing to buy I Bonds. I have not had the administrative headaches you and others have had and I certainly do not want them for myself or my heirs. Converting my login at TD to ID.me is a distant secondary consideration on if I am willing to continue buying I Bonds if TD does not improve their customer service when something occurs for a person like you who has taken reasonable actions which are deemed to be insufficient.
Post: What to do about the new ID.me login requirement at TreasuryDirect
Link to comment from September 15, 2026
Thanks John. Your forum article sent me hunting for more detail on the methodologies S&P Dow Jones indices use to maintain the index. Their hard work and professionalism certainly makes investing easier for me.
Post: The Silent Committee
Link to comment from September 15, 2026