Your Money

As the 2024 tax season unfolds, our tax-planning partner identified an unusual pattern in tax returns prepared using TurboTax: a surprising number of returns reported Social Security benefits as tax-free when they should be taxable. This could lead to IRS scrutiny, unexpected tax bills, or penalties.

How We Detect These Issues

Our tax planning partner, Holistiplan, runs a parallel tax calculation on every uploaded return. This helps:

1. Identify Trends: They spot recurring tax issues and alert advisory firms like PWM.

2. Flag Errors: If the system correctly records data but calculations don’t match expected outcomes, it flags the return for review.

What Actions Should You Take?

If you are a TurboTax user and have not filed yet, the bug may already be fixed. However, early filers may still be affected. While TurboTax may inform you of the error, you should be proactive, review your return, and file any necessary amendments.

For those yet to file, double-checking the taxable Social Security field can prevent future complications.

Understanding Social Security Taxation

Social Security is only tax-free when total income is below:

• Single Filers: $25,000

• Married Filing Jointly (MFJ): $32,000

Income includes Modified Adjusted Gross Income (MAGI), which factors in tax-free bond interest and half of Social Security benefits. Up to 85% of benefits may be taxable at higher incomes.

Why Tax Planning Matters

This trend highlights the need for proactive tax planning. Catching errors early ensures compliance, optimizes financial outcomes, and provides peace of mind. Reviewing tax returns is a key part of PWM's financial planning service. Please contact us if you would like more information or a second option on your tax return.

Must I pay taxes on Social Security benefits?
source: Social Security Administration

Your Life

From search history to shopping habits, your online activity is constantly being tracked—and often without you realizing it. This article from Duke University breaks down how data collection works, who’s watching, and why it matters for your privacy. It also highlights the importance of digital literacy and taking simple steps to protect your personal information. In today’s tech-driven world, staying informed is the first step to staying safe.

Yes, You’re Being Watched on the Internet
by Robin Smith

Complexity Simplified

Dish soap is a household staple, but it’s not the all-purpose cleaner many of us assume it is. This Home Guide Plan article lists seven everyday items—like your car, hardwood floors, and cast iron pans—that dish soap can actually damage over time. Using the right cleaner for the right surface not only protects your belongings but also saves you time and money in the long run. Before you reach for the suds, it might be worth a second thought! 

7 Things You Should Not Clean With Dish Soap
source: Home Guide Plan

Trivia