Taxes

When I searched HD I was surprised how many articles and Forum posts I wrote about taxes, all kinds of taxes over several years. The topic is so universal and so complex it is never dull and never not controversial. 
These days social media is inundated with posts about taxes, the very great majority are nonsense or fake information. My favorite these days is seniors should be tax free because they “paid their dues.” Or, they should not pay property taxes if they don’t have a mortgage.

Harry Sit has written an article on his website, The Finance Buff, this morning 9/14/2026, describing the new requirement for using ID.me to log into a TreasuryDirect account. I found the article particularity informative as, like him, I had previously obtained a ID.me account.
His closing comment, “You have two bad choices. Either give sensitive information to a private company picked by the government agency or sell everything and pay taxes. I really don’t like this,

My wife and I are 73 and 75 and in RMD territory. With pension, SS and RMD our marginal tax bracket is 24%.
80% of our assets are in tax sheltered IRAs. Other than QCDs to reduce tax liability are there any other strategies? We recognize that one of us will be facing the widow/widower’s tax situation. Also IRMAA will take a bigger chunk of our Medicare bill.
My feeling is that we continue with our current situation and pay the effective tax rate of maybe 18 –

The US Treasury Department announced that the debt has increased to 40 Trillion dollars. In the articles explaining the debt, I keep reading about how Social Security payments are adding to the debt. Can someone please explain to me how that is? My understanding is the payments are made from collections of  Social Security taxes from current employees and employers, as well as taking money from the Social Security trust fund. So please explain how a self funded program adds to the deficit.

If you are expecting a 2025 tax refund that has not yet arrived and/or you have received a IRS CP53E notice then the Taxpayer Advocate Service has the following guidance –
There has been a lot of information in the news about how the IRS is moving away from paper checks. While direct deposit is a safe and secure way to get your tax refund, there are scammers out there looking to capitalize on any confusion about updating your bank account information.

This post is an extension of Rick’s and Richard’s recent posts regarding taxes in retirement. 
A recurring issue I dealt with as a tax preparer was calculating a (unpleasant) surprise the first year that someone retired. While working, the employee typically gets a paycheck with adequate tax withholding. When he leaves the job behind for the greener pastures of retired life, things can get a little more complicated. Now, instead of a single W2 to deal with,

A recent post about the taxation of Social Security (SS) benefits provided an example of the complexity of the way that SS benefits are taxed, and how they interact with other sources of income. I’ve read innumerable articles on this complexity, and experienced it first hand while preparing hundreds of tax returns for AARP TaxAide. Clients were frequently surprised and confused by this.
The referenced post’s example posits a couple, 65+, MFJ tax status, with $50,000 in combined SS benefits.

Per the TreasuryDirect website –
https://www.treasurydirect.gov/savings-bonds/idme-one-month/
ID.me will replace your TreasuryDirect traditional login and will be required after October 28, 2026.
As was noted today on the Boglehead’s Forum if you have holdings directly with the US Treasury and decide to and are able to sell all such holdings before the login change over you would still need to be able to login in 2027 to get your 2026 tax documents like 1099-Int., etc.

Complaining about taxes is not unique to seniors or in my case maybe a super senior, but they are mighty vocal and prolific on the internet. I was curious, how much could a age 65+ couple earn in retirement before actually paying federal income taxes on their money?
I ran a couple of scenarios using AI tools. I was a bit shocked at the results. Here is an example …
I asked what a couple both age 65 + with combined SS benefits of $50,000,

Along with changes to the application of the COLA there is discussion about changing the way and amount of income taxes applied to SS benefits.
It’s quite complex, but here is a link to some alternatives from the Committee for a Responsible Federal Budget. https://www.crfb.org/papers/new-approaches-social-security-benefit-taxation

Have any HumbleDollar readers who are subject to IRMAA filed a tax return more than 2 years late? If so, I’d love to hear your experience.

I read this article from Kiplinger online about the four ways couples should prepare for the Widow’s Penalty.
https://www.kiplinger.com/taxes/tax-planning/how-to-prepare-for-the-widows-penalty
The article states that in an unfortunate twist of the tax system, losing a spouse may trigger a huge financial hit called the widow’s penalty.  The good news – you can plan for it.  It is a good read. Your thoughts and your plan.

Many American’s perception of the taxes they pay is seriously distorted. Many seem to believe that withholding from their pay is the taxes they actually pay or that taxes due at year end reflect higher taxes rather than likely under withholding.
A major misunderstanding is that the tax bracket they are in represents their real tax rate. I know taxes are complicated, but not that complicated. 
I conducted a simple exercise. Using several AI tools I calculate the 2026 federal income tax for a household with two young children earning the US median income.

Do a Roth conversion in November or December and you’ve made a smart move in a low-income year. You’ve also just bought yourself a tax problem.
The IRS wants its money as you go, not in one lump next April. And for estimated payments, it grades you quarter by quarter. Say you convert $100,000 in December and the conversion generates a tax bill in the low $20,000s. Pay it all with a single January estimated payment and you might think you’re square.

We have recently considered buying another property closer to family.    Since selling our current home may take some time we were thinking we could possible use a retirement Roth account to come up with purchase price rather then take a bridge or other loan.  We also do not have enough after tax money in regular accounts to cover the total purchase.  We have been here for many years so it meets tax deduction for primary residence sale.