Where’s My Refund? Tax Planning for Retirees and Oregon PERS Members
The question “Where’s my refund?” is on many of our minds as taxpayers search for answers and monitor their refund status. For retirees and members of the Oregon Public Employees Retirement System (PERS), the tax landscape includes unique factors that can significantly influence both the size of their refund and how quickly it arrives.
As a retiree or an Oregon PERS member, your financial situation may include complex components like pensions, multiple retirement accounts, required minimum distributions (RMDs), and capital gains. Navigating these factors without a solid tax strategy can lead to delays, underpayment penalties, or a smaller refund than expected. Strategic tax planning, however, offers an opportunity to minimize your liability, maximize your refund, and streamline your financial future.
In this post, we’ll guide you through tax strategies relevant to retirees and Oregon PERS members who are working, focusing on three key areas:
- General Tax Considerations: Core strategies and questions that apply to both retirees and Oregon PERS members.
- Specific Guidance for Oregon PERS Members: Withholding adjustments, and quarterly payments.
- Key Points for Retirees: Insights on taxable pensions, tax-efficient approaches to RMDs, charitable giving, and estate planning.
So, if you’re one of the many out there asking, “Where’s my refund?” let’s break it down, starting with tax basics that everyone should understand.
1. General Tax Considerations for Both Retirees and Oregon PERS Members asking, “Where’s my Refund?”
Understanding the Impact of Taxation on Refunds
Your tax liability—the total amount of taxes you owe—is influenced by a combination of income sources, deductions, and credits. Refunds are a function of how much tax you’ve paid throughout the year compared to your actual liability. Overpaying results in a refund, while underpayment may lead to penalties and additional tax due at filing time.
Many taxpayers make the mistake of focusing solely on their refund amount without understanding their overall tax strategy. Ideally, your goal should be to minimize your tax liability rather than to maximize a refund—which is essentially an interest-free loan to the government. For both retirees and Oregon PERS members, effective tax management starts with recognizing your key income sources and tax obligations.
Key Types of Taxes That Affect Refunds
- Income Tax: Oregon taxes income from wages, pensions, and business earnings.
- Capital Gains Tax: Profits from selling investments like stocks or real estate are subject to capital gains tax. Long-term gains (for assets held over one year) often qualify for lower tax rates.
- Estate Tax: Oregon’s estate tax applies to estates valued at over $1 million. Proper estate planning can help mitigate this tax.
- Net Investment Income Tax (NIIT): High-income individuals may face an additional 3.8% NIIT on investment earnings.
Each of these taxes contributes to your overall tax liability, which in turn affects your refund.
Strategies for Reducing Tax Liability
Tax planning involves making strategic decisions throughout the year to minimize taxable income, claim appropriate deductions, and take advantage of tax credits. Some strategies to consider include:
- Roth Conversions: Convert traditional retirement accounts to Roth IRAs during lower-income years to reduce future taxable income. This strategy is especially beneficial in the early years of retirement before Social Security and RMDs begin.
- Tax-Loss Harvesting: Offset capital gains by selling underperforming investments.
- Asset Location Optimization: Place tax-inefficient investments (like bonds) in tax-advantaged accounts to reduce ongoing tax liability.
- Charitable Deductions: For taxpayers who itemize, consider bunching multiple years of charitable donations into a single tax year to maximize your deduction impact.
- Health Savings Accounts (HSAs): If you’re still working and have a high-deductible health plan, maximize HSA contributions for tax-deductible savings that grow tax-free.
These strategies are just a few that I cover in our video and blog “What Happens to Your Tax Liability with Proper Financial Planning?” which provides an overview of how to manage tax liability proactively.
Key Questions to Ask Yourself Before Filing
To avoid delays and surprises, review your tax situation using these questions:
- Did you receive all required tax documents (e.g., W-2, 1099-R, 1099, Schedule K-1)?
- Are you using the standard deduction, or would itemizing yield greater tax savings?
- Have you accounted for changes in income, such as investment gains or retirement withdrawals?
- Are your estimated tax payments (if applicable) sufficient to avoid underpayment penalties?
Answering these questions and addressing potential discrepancies early can streamline the refund process.
Avoiding Common Tax Errors
Mistakes such as transposing numbers, omitting income, or selecting the wrong filing status can delay refunds. Double-check all entries on your tax return, particularly Social Security numbers and bank account details for direct deposit. Additionally, keep copies of all documents and receipts in case of an audit.
Another common issue involves tax credits. If you qualify for credits like the Child Tax Credit or the American Opportunity Credit, ensure that the supporting forms (e.g., Form 8863) are completed accurately. Many of my clients take comfort in partnering with an accountant to help ensure their taxes are filed accurately and on time.
2. Tax Guidance for Oregon PERS Members Asking, “Where’s My Refund?”
Managing Withholdings
If you’re still working and contributing to Oregon PERS, properly managing your W-4 withholdings can prevent unexpected tax bills or reduced refunds. Underpayment penalties can occur when insufficient taxes are withheld, especially if you have multiple income sources or bonuses. To avoid these penalties, ensure your withholdings cover at least 90% of your expected tax liability or 100% of last year’s tax obligation (110% for high earners).
Example – If you’re working full-time while also earning income from a side business: Your employer withholds taxes from your salary, but your side income is untaxed. If you don’t adjust your W-4 to withhold additional taxes or make estimated payments, you may owe a significant amount at tax time, reducing or eliminating your refund. Adjusting your W-4 to withhold extra taxes can help ensure a more predictable refund.
Maximizing Pre-Tax Retirement Contributions
Many Oregon PERS members contribute to 403(b), 457(b), or traditional IRA accounts in addition to PERS. Contributions to these accounts can lower taxable income, which may increase the size of your refund.
- 403(b) and 457(b) Contributions: Contributions reduce your taxable wages, which lowers your tax liability and may boost your refund. In 2025, you can contribute up to $23,500 to these plans. If you’re over fifty, you can contribute another $31,000. If you’re between 60 and 63, an additional catch-up is available, allowing for contributions up to $34,750.
- Traditional IRA Contributions: If you qualify, making deductible IRA contributions can also reduce your taxable income, even if you participate in an employer-sponsored plan.
Example – If you’re a PERS employee earning $80,000 and contribute $10,000 to your 457(b) plan: This reduces your taxable income to $70,000, lowering your tax burden and potentially increasing your refund. If you’re in the 22% federal tax bracket, this contribution could save you $2,200 in federal taxes alone.
Checklist for Oregon PERS Members (and, anyone else still working)
Here’s a detailed checklist to guide you through what to review once you get your return back:
The highlights include:
- Review W-2 and 5498 Forms: Ensure these forms accurately reflect your income and retirement contributions.
- Track Investment Income: Report capital gains or losses from stock sales on Schedule D.
- Child and Dependent Credits: If applicable, confirm that you’re claiming the correct credits.
- Verify Catch-Up Contributions: If you are over 50, check whether you made allowable catch-up contributions to retirement accounts.
- Review State Tax Deductions: Certain retirement contributions may be deductible under Oregon state tax laws.
3. Key Tax Considerations for Retirees asking, “Where’s my Refund?”
How Oregon PERS Pensions Affect Refunds
If you’re a retired PERS member, pension income may form a significant part of your taxable income. Unlike Social Security, which may be partially exempt from taxation depending on your income level, Oregon PERS pensions are fully taxable by federal and state governments. Without proper withholding, this can lead to a large tax bill or an unexpectedly small refund.
Additionally, pension recipients must stay aware of changes to tax laws that could impact their liability. For example, temporary provisions under the Tax Cuts and Jobs Act (TCJA) are set to expire at the end of this year, potentially increasing individual tax rates.
Example – If you recently retired and are now receiving a monthly PERS pension: If you don’t adjust your state and federal tax withholdings correctly, you might not be withholding enough throughout the year, resulting in a tax bill instead of a refund. Checking and adjusting your withholdings early in retirement can help you avoid a surprise tax bill at filing time.
Managing Required Minimum Distributions (RMDs)
Once you reach your required minimum distribution (RMD) age, you must take annual withdrawals from tax-deferred accounts like IRAs and 401(k)s. These withdrawals increase your taxable income and can push you into a higher tax bracket if not carefully managed. Higher taxable income can also lead to increased Medicare premiums and additional taxes on Social Security benefits. (Wondering when you have to start RMDs? If you were born between 1951-1959, you start at age 73. If you were born after 1960, you start at age 75.)
One strategy is to coordinate RMDs with other income sources to avoid large tax spikes. For example, delaying Social Security benefits while using smaller withdrawals from retirement accounts can help control taxable income in the early retirement years.
Example – Mary turned 73 and must take an RMD of $20,000 from her IRA: If she takes the full amount, it could push her above the Medicare Income-Related Monthly Adjustment Amount (IRMAA) threshold, causing her Medicare Part B and D premiums to increase. Instead, she withdraws only the required amount from her IRA while covering additional expenses from her taxable brokerage account, which has investments taxed at lower capital gains rates. By staying under the IRMAA threshold, Mary avoids a costly Medicare surcharge while still meeting her RMD obligation.
Qualified Charitable Distributions (QCDs)
Retirees over 70½ can direct IRA withdrawals to qualified charities through Qualified Charitable Distributions (QCDs). This reduces taxable income while satisfying RMD requirements. Confirm that the QCD amount is excluded from taxable income on your return to ensure proper reporting.
This strategy is particularly effective for those who do not itemize deductions, as it directly reduces taxable income without affecting the standard deduction.
Example – John, a retired Oregon PERS member, must take a $15,000 RMD this year.: He donates $10,000 directly from his IRA to his favorite charity as a QCD. Because this amount is excluded from his taxable income, John only reports a $5,000 taxable withdrawal instead of the full $15,000, lowering his tax bill and keeping his adjusted gross income lower.
Checklist for Retirees
Here’s a checklist to help you review your return:
Highlights include:
- Claim the Higher Standard Deduction: Retirees over 65 are eligible for an increased deduction.
- Verify RMD Reporting: Ensure all required withdrawals are listed on Form 1040.
- Check Charitable Contributions: Confirm that QCDs are properly documented.
- Monitor Investment Income: Review Schedule B for interest and dividends.
- Review Estate Planning Strategies: If your estate exceeds Oregon’s $1 million threshold, consider strategies to reduce taxable value.
Estate and Legacy Planning
Oregon’s estate tax can impact your heirs if your estate exceeds $1 million. Strategies like gifting, establishing trusts, and charitable giving can help reduce estate taxes and ensure your legacy is preserved. Holistic financial planning includes not only how much you have and how much you’ll spend, but also ways to ensure your wishes are met during life, and after you’re gone.
Avoiding Refund Delays
If you’re asking, “Where’s my refund?” know that the IRS and state tax agencies often flag returns for additional review if errors are detected or if your situation involves complex transactions, such as large capital gains or a sudden increase in income.
To avoid delays, consider these steps:
- File Electronically: E-filing reduces the chance of processing errors and speeds up refunds. Paper filings often take longer to process.
- Double-Check Bank Information: Incorrect bank account details can result in refund delays or rejected direct deposits. Ensure your information is accurate.
- Monitor Form Accuracy: Mismatched numbers between W-2, 1099, and 1099-R forms can trigger IRS reviews. Cross-check your tax documents with your employer and financial institutions.
- Submit Early: Filing early accelerates processing and reduces the risk of identity theft, where fraudulent filers may attempt to claim your refund.
- Track Refund Status: Use tools like the IRS’s “Where’s My Refund?” tool and Oregon’s state tracker to stay informed. These platforms provide real-time updates on the status of your return and any potential delays.
Additional Tax Strategies for Long-Term Success
Tax planning does not end after filing your return. Continuous, forward-looking strategies can enhance your financial well-being and minimize your tax liability over the years. Below are additional tax-saving strategies relevant to both Oregon PERS members and retirees:
Tax-Efficient Investments
Investments can create both opportunities and challenges in tax planning. By structuring your portfolio with tax efficiency in mind, you can maximize after-tax returns.
- Use Index Funds: Index funds and ETFs typically have lower turnover, which minimizes taxable capital gains distributions.
- Dividend Strategies: Focus on qualified dividends, which are taxed at lower rates than ordinary income.
- Municipal Bonds: Interest from municipal bonds is often exempt from federal income tax and may also be exempt from state taxes.
Multi-Year Tax Projections
Proactively projecting your tax situation over several years can help you identify optimal times for certain actions, such as Roth conversions, large withdrawals, or charitable giving. This long-term view can also prevent unintentional spikes in income that may trigger higher Medicare premiums or the Net Investment Income Tax.
Continued Planning
“Tax planning is a year-round sport,” said someone with a weird definition of sport. As mentioned in this post, the Tax Cuts and Jobs Act will sunset at the end of 2025 if there are not legislative changes passed. To get a glimpse into some of the tax provisions being discussed, and our take on the likelihood we’ll see changes, check out our blog Trump Tax Law Changes – 2025 and Beyond.
Communicating with Your CPA and Advisor
Effective collaboration with your CPA and financial advisor can improve your tax outcomes. Ensure that your advisor understands your complete financial picture, including pension income, investment portfolios, and any planned large expenditures. Regular tax reviews and strategy meetings can help you adjust withholding and estimate tax payments as your circumstances evolve.
Questions to discuss with your tax professional may include:
- Should I adjust my pension withholding for the upcoming year?
- Are there opportunities to reduce my taxable income through deductions or credits?
- How can I minimize state and federal taxes on my investment income?
- What estate planning strategies should I consider for reducing Oregon estate taxes?
Your advisor can provide tailored recommendations based on your unique goals and financial situation, and help you answer that question, “Where’s my refund?” If you want to talk about your unique tax picture, reach out. We welcome the connection and opportunity to help.
