Those of you with nothing better to remember may recall my confession last year that I had to hand over booga bucks to both the Internal Revenue Service and the governor. Hazards of retiring in midyear and not having nearly enough withheld, don’t you know.

I knew this year I wouldn’t have any earned income to speak of, save for the generous stipend for writing this column once a week. And Bonnie retired at the beginning of the year, working only part-time as a kitchen substitute. So with all, or nearly all, of our Social Security nontaxable and part of our pensions already taxed, I hoped our tax liability would be lower. Just to be safe, I had extra federal withholding taken out of my biggest pension check.

Guess what? When I figured our federal taxes, we’re getting nearly every penny of withholding back. Retirement pays off after all.

The taxman giveth …

Then the other shoe dropped. I figured our state taxes. When we get our federal tax refund, we’ll be sending most of it to the Statehouse.

… and the taxman taketh away.

I noted several factors that helped wipe out our federal tax liability. For one thing, in recent years, because our primary mortgage is paid off and despite significant charitable contributions, we had been taking the standard deduction instead of itemizing. And the standard deduction increases once you hit age 65. But this year, I discovered it would pay us to itemize. For the first time in decades, because the cost of our health insurance is no longer pre-tax, Bonnie is having to buy an individual health insurance policy and our dental visits are no longer covered, we paid out thousands and thousands and thousands of dollars — well, thousands anyway — in medical expenses last year. That’s all tax deductible, at least after a 7.5 percent income threshold is reached. And the extra state income taxes we had to pay last year were deductible, too.

We did have to include a very small portion of our Social Security under taxable income, but only because we took a chunk of money out of one of our otherwise untouched pension funds to cover a vacation. But only roughly half of our disposable income was taxable, and our exemptions and deductions wiped out all but a few dollars of it. Adding up the withholding from my individual retirement account, large pension, our big withdrawal and Bonnie’s part-time work, Uncle Sam owes us this time.

Unfortunately, we discovered even the extra exemptions for being 65 didn’t cover our state tax liability. And the Indiana Department of Revenue doesn’t have the machinery in place that Uncle Sam does for withholding from pensions, so only one of ours was covered. We not only owe hundreds and hundreds and hundreds of dollars, but we may have to fork over a few penalty dollars as well.

So we’re learning about estimated tax payments. If only we had looked into that a month or two earlier.

I’ve always done my own tax returns. I could never see paying out good money to tell the government what I owed, or what it owed me, when with a careful reading of the instructions and a few commentaries on tax preparation I could figure out well enough what to include and what to deduct without venturing into the dangerous territory of fabricating things, which gets you into trouble anyway if you get caught.

But I am discovering tax preparation gets a little more complicated once you start digging into that retirement income.

Indeed, the taxman giveth and the taxman taketh away. Cursed be the name of the taxman.

Jim Bailey’s column appears on Sunday. He can be reached by e-mail at jameshenrybailey@earthlink.net.