I finalized our federal and state tax returns today. I like to let them marinate for a few days and then review everything once more before filing. This year marked the most streamlined tax return prep I’ve had since retirement. Why? I stepped away from all 1099 gig work at the end of 2024 once my teacher pension began. No more multiple 1099s with expenses to track! The bonus? More time to spend on activities I enjoy.

We’re approaching our fourth year in retirement. The preceding three years of taxable income has been all over the map. Our 2024 and 2025 numbers are nearly identical, so I think we have a realistic baseline to estimate tax liabilities moving forward.

Keep in mind that local, state and federal governments tax income differently, according to type and amount of income. (Not many cities levy an income tax, but St. Louis does!) 2026 will mark the final year we’ll pay Georgia state income taxes on all income, plus full property taxes. Next year, limited income exemptions begin ($35,000) for income taxes and we’ll receive an exemption for the school tax portion of our property taxes. Eventually, up to $130,000 of income (married filing jointly) will be exempted from Georgia income tax. Georgia doesn’t tax Social Security income either.

Just for grins, I went back and compared this year’s numbers against those from our last full year of employment. Yes, our current income is less than it was when we were both working, but it’s the tax treatment of the types of income that makes the biggest difference. Just saying, we paid an obscene amount of taxes when we were employed full-time!