I figured I’d be income tax-free for 2020, but I had forgotten that I got the Dec 2019 paycheck in early January. That pushed my total income for the year to $14,140 (more than the $12,400 personal deduction) so I ended up paying ~$200 in federal income tax on the difference. Since taxes were withheld on all income the refund will be on the positive side, and the $600 2nd covid stimulus will be added in since I didn’t get it due to my direct deposit info no longer being valid.
Income tax definitely won’t be an issue going forward as my taxable income will be ~$6,000/yr (see below).
gory details: delayed paychecks + 457 withdrawals
The vast majority of my 2020 income ($9,822.13) was delayed TxDOT payments from 2019 and will not happen again. $1400 of it went directly into the 457, leaving~$8400 before taxes.
I withdrew $4,300 from the 457 in 2020 , averaging $478/mo since I started withdrawing in April. I feel pretty good about that, since both my relocation movements and expenses have normalized after that first quarter. Luckily the account had earned ~$2,400 so the capital reduction is about $1,900.
I expect to withdraw $6000/year going forward ($500/mo x 12 months). We’ll see how close that gets us to the 2028 promised land, when hopefully the belt won’t have to be so tight.
odds and ends
- $46 early withdrawal penalty on the tiny 401 portion of the distributions - still cheaper than the $86.76/yr the separate 401 was costing in fees. The 457 fee is $37/year which I have to pay anyway, and is not subject to the penalty.
- $17 to taxslayer, because filings with 1099-R apparently aren’t eligible for the completely free version. Fine, whatever.