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Pension and taxes
Old 04-16-2013, 09:30 PM   #1
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Pension and taxes

My pension will be my monthly income upon retirement and I get to choose how much I have taken out for taxes, Fed and State. How the hell do I do this? W*rking it's been around 28%. I can't believe I would choose the same for an income that will be 30% less? Time for a tax consultant or is there a way to figure this out?
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Old 04-16-2013, 09:34 PM   #2
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Turbotax can help you figure it out.
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Old 04-16-2013, 09:37 PM   #3
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The annual TurboTax? I have that, or the website? Thanks
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Old 04-16-2013, 10:15 PM   #4
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IRS has a with holding calculator. Your state may have one, many states exempt pensions.

IRS Withholding Calculator
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Old 04-16-2013, 10:19 PM   #5
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Thanks!
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Old 04-17-2013, 07:02 AM   #6
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Linny727. I ran prospective numbers through Turbo Tax to come up with an estimate and added in capital gains, dividends, plus DW's tax and SS (she gets an earned income stipend from her law firm) and deduct all of that from my pension. Since then I just adjust the withholding up or down a bit after I do each year's taxes.
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Old 04-17-2013, 11:45 AM   #7
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Quote:
Originally Posted by linny727 View Post
The annual TurboTax? I have that, or the website? Thanks
Just use the software to run a "phantom" return. Plug all your numbers in a see what your tax bill would be. Divide the pension amount into your tax bill (gives you a decimal) to derive the estimated percentage of withholding to get your tax bill to zero.
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Old 04-17-2013, 10:28 PM   #8
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This is a link to the Turbo Tax Tax Forecaster.
TurboTax® TaxCaster - Free Tax Calculator - Free Tax Estimator
This is a VERY useful tool for retirement tax planning.
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Old 04-18-2013, 09:59 AM   #9
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Originally Posted by jclarksnakes View Post
This is a link to the Turbo Tax Tax Forecaster.
TurboTax® TaxCaster - Free Tax Calculator - Free Tax Estimator
This is a VERY useful tool for retirement tax planning.
+1
good call out.
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Old 04-18-2013, 10:27 AM   #10
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Quote:
Originally Posted by heeyy_joe View Post
+1
good call out.
+1. Taxcaster is very useful.
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