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Old 01-22-2012, 07:48 AM   #41
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Originally Posted by Lancelot View Post
I have a tiny Roth IRA and never jumped through the hoops to convert my Traditional IRA. I will most likely defer SS and draw down my Traditional IRA first, maybe that will lower the tax bite when the RMD kick in. Sounds good any way
I hope your plan works (I'm doing the same )...
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Old 01-23-2012, 02:25 PM   #42
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Hi, First post here.
Check me on this but I believe about the only income that doesn't affect the taxable amount of Soc Sec is Roth income. If someone else has already posted this I apologize for being redundant. All other income sources can increase the tax on Soc Sec income at least that's my take on it.
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Old 01-23-2012, 03:08 PM   #43
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Originally Posted by Bogie View Post
Hi, First post here.
Check me on this but I believe about the only income that doesn't affect the taxable amount of Soc Sec is Roth income. If someone else has already posted this I apologize for being redundant. All other income sources can increase the tax on Soc Sec income at least that's my take on it.
You are correct that Roth distributions do not count as taxable income and therefore do not come into play when calculating txaes on SS income. Any income that is not taxable is excluded from that calculation.

For more details see here:
Benefits Planner: Taxes and your Social Security benefits

Quote:
Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
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Old 01-23-2012, 04:18 PM   #44
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I think Bogie meant that even tax-exempt muni bond interest affects the taxation of Social Security income. I believe that is true.
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Old 01-23-2012, 05:48 PM   #45
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Muni bond interest income can negatively affect the taxability of FICA retirement benefits as well as increasing the cost of medicare premiums. We have not taken any distributions from our ROTH but wouldn't be surprised if we get dinged when we do.
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Old 01-23-2012, 06:16 PM   #46
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I think Bogie meant that even tax-exempt muni bond interest affects the taxation of Social Security income. I believe that is true.
Correct.
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Old 01-23-2012, 06:21 PM   #47
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I think Bogie meant that even tax-exempt muni bond interest affects the taxation of Social Security income. I believe that is true.
It's even in the link that Alan provided: the Nontaxable interest is the muni interest.
************************************************** ***
Note:

Your adjusted gross income
+ Nontaxable interest
+ of your Social Security benefits
= Your "combined income"
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Old 01-24-2012, 12:49 PM   #48
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I was pretty surprised to see that tax-free munis could make some of the Soc Sec taxable. As far as I can tell, Roth is the only source of money, except principle under your mattress, that doesn't make Soc Sec subject to Federal Tax. Thanks all that replied.
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Old 01-24-2012, 01:39 PM   #49
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I was pretty surprised to see that tax-free munis could make some of the Soc Sec taxable. As far as I can tell, Roth is the only source of money, except principle under your mattress, that doesn't make Soc Sec subject to Federal Tax. Thanks all that replied.
Yep, not even Suzie O. with all her Munis can escape.
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