HRBlock 2021 Deluxe still shows zero refund/owed deep into the Q/A

[MoneyGoatee]

I'm using H&R Block 2021 tax software, the deluxe version with state.  I've finished the sections for incomes, deductions, and credits, and I've reached the health insurance section but can't go further because I haven't got the 1095-B form, due end of January. But why aren't tax refund & owed amounts updated? In past years I see them updated after the incomes sections. But now they still show zeros as in this screen capture. Did I miss some entries, or is this a bug in the software? I had over $20k gross income in 2021 and much of it has not been taxed. I should see tax owed by this point.

[MDM]

If you put your information into a tax estimation tool (e.g., the case study spreadsheet, TaxCaster, etc.) what does that suggest?

Are you getting a non-deductible credit (e.g., the saver's credit) that takes your tax to exactly $0?

[secondcor521]

If you're MFJ, the standard deduction is over $25K, so even with ordinary income over $20K you might have zero tax liability for both federal and state.

Two other ideas:

1.  Enter temporary fake data entries for the health insurance stuff for now or click the second button temporarily saying you didn't have ACA coverage and then see what the refunds say.

2.  See if H&R Block software can print a 1040 to the screen for you.  Take a look at line 15 at the bottom of page 1 and line 16 at the top of page 2.  If one or both are zero, then my theory above could be correct.  If there is a number on line 16 and numbers further down on lines related to credits, then @MDM's theory is probably correct.

[MoneyGoatee]

Thanks for both of the replies.  I opened up the actual Form 1040 and it did seem zero was the right amount.  The data are still incomplete so I can't be sure.  I'm retired with $1.2m (and counting) and living fairly comfortably.  But I got very low "income" last year, by far the lowest in my life, so I'm encountering new issues at tax time, strange things I haven't seen before. 

As many retirees know, income during retirement could be very low due to all the tax advantages.  You could be a millionaire and have "income" so low you can actually qualify for government aids.

[secondcor521]

It may make sense for you to do some Roth conversions to pull forward some of the high taxes you might pay when you're 75 into your current, relatively low tax bracket.

This is especially true if you qualify for any refundable tax credits, because you can sometimes effectively do Roth conversions for 0% federal tax cost.  Paying 0% now beats paying 33% later.

Most of the time people think about deferring taxes until they're in a lower tax bracket later.  But being retired early can present an opportunity to accelerate income into a lower tax bracket sooner (i.e., now).

(And if not Roth conversions, there are other ways to recognize income earlier.  The most common other one I know of is capital gains harvesting.)