No Income Tax in 2022

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By now everyone has filed their tax returns for 2022. I’ve been using TurboTax for the past 10 years or so and have seen the prices increase every year. This year it cost me $158 to file my forms. The reason it was high is that I have investment and small business income. $158 is reasonable, if you compare it to what a professional tax service would charge. It would be nice if they based the price on income level because my 2022 income was the lowest it’s been in almost 40 years. I had no earned income and my small business income was offset by operating expenses. For 2022, my only source of income was from interest and dividends. The amount was under the standard deduction ($12,950), so I did not have to pay any federal or state income tax.

It was good not to pay any taxes on my income, but the $158 paid to TurboTax felt like a tax. Since there was no earned income, there was no tax refund either. How we managed to live on $1000 per month is another story. The only way was by having a house mate who paid for groceries, and I paid all the other bills. This low income makes other cost savings possible. The property tax refund for 2023 will cover 75% of the tax bill. It also makes us eligible for low-income healthcare benefits. I can also apply for a benefit that will reduce the cable Internet bill by 50%. Taking advantage of these low-income benefits is the main way we have been able to manage our budget in early retirement. It also requires a lot of cost cutting and money management.

At this time, we are 1/3 of the way into 2023. People are not concerned about a pandemic anymore, but the economy is still struggling to find a balance. Fear of a recession and high inflation is keeping stock prices under pressure. The only redemption for retirement income is that interest rates are higher than they have been in over ten years. Now is the time to invest in good companies that pay dividends and hold them until the economy grows stronger.

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