And minimum tax payments have been kicking my backside last year, but our combined incomes didn’t even break the standard deduction, so we get it all back. What really was bad was the IRA tax payment that was triggered by my turning 60 last year. Taxes were being taken out on income I hadn’t gotten, which is a major bummer and would not have been refunded if I didn’t start making at least quarterly or more frequent withdrawals.
But long story short because it’s 0330 and I finally got my words back to make a post, we got a refund of over $2K on an income of just over $15K, which even just looking at the unfairness leaps out at you. That’s a marginal rate of 13+% on a sub-poverty income. Granted we got it all back, but $2K is a lot of groceries, haircuts, and massages not gotten because I didn’t get the money during the year. In fact, doing a quick calculation, I had more taxes taken out than I got in income from the trust. By my calculations I got about $1800 in non-exempt income from the trust and the IRA, but there was right at $2100 ± a few $ taken out in taxes. That’s a tax rate of more than 50%, roughly 54%, and last I checked the top bracket was only 37%. And something’s definitely rotten in
DenmarkDC when my little pittance has withholding at more than the top tax bracket.
In non-news I didn’t win the Lotto again, and I still don’t have the bits for the Sprint-T. And it looks like I will have to spend the refund on plumbing problems and a cat with a skin condition.