Annual Tax Planning Worksheet

Why do so many retirees overpay tax on income they fully controlled? Because they treat the return as a thing that happens to them in April, when the real game is over by December 31. This worksheet flips that. It’s a single page you fill out every fall to see exactly how much room you have left in the low brackets, and what it’s worth to use it.

In retirement your taxable income is unusually flexible. You decide how much to convert, how much to realize, how much to pull from which account. That flexibility is the whole opportunity, and a worksheet is how you stop wasting it.

The one number it builds toward

The worksheet walks you to your projected taxable income for the year, then shows the gap to the top of your current bracket. For 2026, a married couple filing jointly sits in the 12% bracket up to $100,800 of taxable income, the 22% bracket up to $211,400, and the 24% bracket up to $403,550. The standard deduction is $32,200, with an extra $1,650 per spouse who’s 65 or older. If you’re 65-plus there’s also a temporary $6,000 senior deduction per eligible person, which phases out at higher income.

Say your projected taxable income lands at $130,000. You’ve got real room before the 24% bracket. That gap is the space to do a Roth conversion or harvest long-term gains at a lower rate. Leave it empty and it’s gone. Brackets don’t roll over.

What you fill in

• Wages, pension, and any part-time income.
• The taxable portion of Social Security, which climbs as your other income climbs.
• Interest, dividends, and realized capital gains year to date.
• Any RMD you’re required to take, since that income isn’t optional.
• Planned Roth conversions and gain harvesting still on the table.

The second-order trap

Here’s what a bracket-only view misses. Pushing income up doesn’t just cost you the marginal rate. It can drag more of your Social Security into taxable territory, and two years later it can lift your Medicare premium through IRMAA, the income-based surcharge. The worksheet flags the nearest IRMAA threshold so you convert up to a line, not through it. For 2026 the first surcharge hits above $109,000 of income for a single filer and $218,000 for a couple.

So before you sign off on a conversion, check the worksheet against Roth conversions without triggering IRMAA. The cheapest dollar of conversion is the one that doesn’t also raise a premium you won’t see coming until later.

Fill it out in October, while there’s still time to act. The return in April just records decisions you already made. This is where you make them.