No Income Tax Again (2023)

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This year it cost me $154 to file my taxes with TurboTax. The reason it was high is that I have investment income. My net profit from Ebay sales was only $145 in 2023, so I didn’t bother filing it as small business income. My primary source of income during the year was interest and dividends. The amount was under the $13,850 standard deduction, so I did not have to pay any federal income tax. I had to add $1890 in municipal bond income, which was excluded from federal tax to my state income which means that I owe them $24. I guess the title of this post should be “I almost paid no income tax”. It is good to pay no federal tax on my income, but the $154 paid to TurboTax felt like a tax.

Since there was no earned income, there was no tax refund for me. We manage to live on $1200 per month, but it is very difficult. Having a house mate who helps pay for groceries, applying for healthcare assistance, and getting a property tax refund that covered 75% of the tax bill helped. I wasn’t able to get in on the Affordable Connectivity Program, so I switched to a lower data speed to reduce our monthly Internet bill. It requires continuous cost cutting and money management to keep up with inflation. As the cost of everything keeps going up, I have had to look for creative ways to save money (see my posts under topic: “Money Saving Tips” on this blog).

The hardest part is not being able to travel, go out to eat, go to a show, or buy new clothes. Most everything we buy is on sale or used. Back when I had a job, I was always careful to watch the amount of investment income during the year. I didn’t want to get put in a higher tax bracket and have to pay tax instead of getting a refund. Now that I am semi-retired and waiting to go on social security, I still have to watch the amount of investment income I have coming in. Too much income and I have to pay taxes, or potentially lose some of the benefits of having a low annual income. Once I start social security, it will be difficult to avoid income tax. But that’s okay because the extra money will help make life a little easier.

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