Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 04-16-2010, 07:00 AM   #41
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
I have a very simple retirement income situation. Currently, my income comes from only tax-deferred vehicles (TIRA, Rollover IRA, and SPIA).

I simply have FIDO take out 15% FIT of my monthly withdrawal from my cash bucket and send it in. 15% is a bit high, but that's due to not having taxes taken out of my monthly SPIA income. I could have them also take out state income tax, but luckly I live in a state where retirement income is not taxed on a state or local level.

In early December (when I get the early version of TT) I simply plug in my YTD income, December's forecast withdrawal, and YTD FIT already paid.

Depending on the result, I adjust my December FIT tax payment to target my annual taxes within a $50+/- variance.

Nothing fancy at all, and it eliminates quarterly tax submissions....
__________________

__________________
rescueme is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-16-2010, 12:34 PM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,456
Rescueme - that's a pretty novel approach from what I have seen and very clever! Congrats!

You came up with the 15% number based on prior year tax patterns I assume?

(wouldn't work for me as 95% of my investments are non-taxed deferred and we are not drawing from IRAs at present and have no annuities (SPIA))

Audrey
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 04-16-2010, 03:44 PM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,031
Quote:
Originally Posted by audreyh1 View Post
Yep - it's pretty easy when all your annual income is from a pension. That means it is a known quantity, and it can be treated just like it was at work with tax withholding.

It's when you have other sources of income (IRA withdrawals, investment income, realized capital gains, etc.) that it becomes tricky as these often aren't predictable.


Audrey

Only one third of my income is from my Pension . The rest is made up of SS Survivor Benefit & withdrawals from my taxable accounts . Since my SS is very close to my pension amount I just doubled my withholding from my pension and so far so good ! I like the fact that I 'm not writing a big check four times a year and if I end up owing anything it is minimal.
__________________
Moemg is offline   Reply With Quote
Old 04-17-2010, 03:20 PM   #44
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,072
I was in a similar situation to Audrey - I have self-employed income and it varies according to my business schedule. In 2008, all of my income was employee income and a *lot* more than what I made self-employed. I ended up paying taxes to the IRA, but the overall tax burden was less than half that of the previous year, so based on my reading of the rules, I'm OK.

I use the AI method for my tax calculations - mine is a bit easier as I have Foregin earned income, so only worry about the SSN and Medicare until a certain threshold of earning is reach and to be honest, I'm endeavoring to stay under that.

The only other variable is the increase in investment income needing to be accounted for in the estimated taxes - as that grows, then I will need a better estimating method .....
__________________

__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.” - George Orwell/Winston Churchill
deserat is offline   Reply With Quote
Reply

Tags
estimated tax, taxes


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
SS estimate inconsistencies statsman FIRE and Money 4 05-01-2009 10:52 PM
Possible to estimate taxes in retirement? utrecht FIRE and Money 10 05-31-2008 07:10 PM
Social Security estimate W2R FIRE and Money 23 04-06-2008 07:09 AM
Tax estimate piano88 FIRE and Money 6 06-25-2007 05:22 PM
What are some ways to estimate my home's value azanon Young Dreamers 7 02-15-2006 01:37 AM

 

 
All times are GMT -6. The time now is 08:33 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.