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Filing for my Pension Benefit-need help
Old 01-21-2015, 11:59 AM   #1
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Filing for my Pension Benefit-need help

So, after leaving megcorp last week, I requested that our benefit center send me the pension paperwork which I just got.

I had some questions that I would appreciate input from the sage and experienced folks here.

During my tenure, I made after tax contributions to the plan, and according to the paperwork, the non-taxable 'recovery' amount comes to about $64/month.

My monthly benefit will be about $1500/month - not much but I wasn't there all that long and they terminated the pension plan some time ago.

I want to have fed and state taxes withheld on a monthly basis.

Q1) Will the amount figured for tax withholding be based on the overall $1500 per month, or $1436 ($1500-$64)?

Q2) Will the Pension Plan provider submit and send 2015 tax info based on overall amount or just the taxable amount? Are there add'l forms and calculations I need to worry about concerning the non-taxable vs taxable amounts when I file taxes next year?

Q3) Is there an easy on-line calculator where I can plug in monthly amount of my pension benefit and make the various selections of withholdings for single, married, married but withhold as single, # of allowances to see what the resultant withholding amounts are? I have a target amount for estimated taxes by income stream already segregated out - so it would be nice to know how to complete the W-4P to hit that $ amount.

Thanks in advance!
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Old 01-21-2015, 12:13 PM   #2
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Why bother having taxes taken out of the pension? You're going to be doing quarterly payments anyway. You keep it cleaner if all tax payments are made in one place.

Q1 - If you do have taxes taken out, it would be on the taxable amount.
Q2 - It should be clean with taxable and non-taxable clearly shown.
Q3 - You'll have to do this for your quarterly tax payments anyway. Do it once and use the IRS calculation sheet.

$1,500/mo isn't bad. It's almost as much as all my mini-pensions added together.

For me, 5 more weeks! 17 (or less) "in-office" days left!
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Filing for my Pension Benefit-need help
Old 01-21-2015, 12:49 PM   #3
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Filing for my Pension Benefit-need help

BBQ, I have about $100 a month of my pension tax free based on after tax contributions to my pension. On your yearly 1099 form (I think that is the correct name of form for pension income) it will segregate out the the difference. One box will report total, and another box will specify taxable income. So yes, it will show it.
I did not want to make quarterly contributions, so I treat my pension like a monthly paycheck. I had to approximate (there are tax estimator calculators out there on internet) what I wanted withheld for state and fed. My pension was so close to my regular check I was able to do this. I must admit, I am a "Christmas in February" person so I always overpay to get a refund.


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Old 01-21-2015, 12:54 PM   #4
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Quote:
Originally Posted by Mulligan View Post
..... On your yearly 1099 form (I think that is the correct name of form for pension income) it will segregate out the the difference. One box will report total, and another box will specify taxable income. So yes, it will show it.........


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It is a 1099 R.
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Old 01-21-2015, 02:57 PM   #5
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For earned income, employers are typically required to withhold taxes. This is documented in IRS Publication 15 (aka Circular E).

For Pension income, this IRS site suggests that Circular E also applies.

You might want to look for an online Circular E calculator to answer your questions, but beware that there are multiple withholding methods listed in Circular E.

-gauss

NOT an accountant
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Old 01-21-2015, 04:28 PM   #6
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Found one:
Salary Paycheck Calculator | Payroll Calculator | Paycheck City


Now I can plug in my monthly pension amount and 'fiddle' with the standard options to see the $$$ being withheld.


If I select Married then per my estimates for this income stream for my portion of expenses (because DW is still w*rking w/ earned income), I need add'l taxes withheld of about $150/month.
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Old 01-21-2015, 05:01 PM   #7
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Don't you have to fill out a w4-P?


You can request $0 withholding.
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Old 01-21-2015, 05:21 PM   #8
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Don't you have to fill out a w4-P?


You can request $0 withholding.
I could, but that's not what I would like to do - instead I just want automatic monthly withholdings estimated to be a portion of our overall tax bill so that we and Uncle Sam are even steven.
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Old 01-21-2015, 05:26 PM   #9
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you will have to figure out how many allowances then - rotsa ruck!
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Old 01-21-2015, 05:53 PM   #10
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you will have to figure out how many allowances then - rotsa ruck!
That is what the calculator I posted allows me to do.

I've done an estimated return for 2015 based on expenses and the resultant tax bill to apply against my income streams.

Turns out I should not have any allowances but add'l withholdings.
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Old 01-25-2015, 04:00 PM   #11
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I used the Intuit (Turbo Tax) quick calculator . I have taxes taken out of my pension, but not my wife and I's SS. By the time you take personal exemptions and the standard deduction you can estimate how much to withhold for taxes.



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