Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Retirement taxes
Old 06-03-2015, 01:14 AM   #1
Recycles dryer sheets
 
Join Date: Nov 2014
Location: Texas
Posts: 164
Retirement taxes

If your in the top end of 15% tax bracket WHAT DO YOU PAY IN
The reason I ask I ran turbo tax app and it shows I would get money back every year ? Once I claim short form deductions. What am I doing wrong ? I am figuring 10 to 12 k a year in federal taxes


Sent from my iPhone using Early Retirement Forum
__________________

__________________
Terryjm51 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 06-03-2015, 06:16 AM   #2
Recycles dryer sheets
 
Join Date: Jan 2010
Posts: 174
might need a bit more information.

keep in mind that LT capital gains and Qualified dividends are taxed differently than regular income
__________________

__________________
jwkde is offline   Reply With Quote
Old 06-03-2015, 06:30 AM   #3
Full time employment: Posting here.
 
Join Date: Apr 2015
Posts: 903
For 2015, under age 65.

Single
Standard Deduction: 6,300
Exemption: 4,000
AGI Limit 15% Bracket: 47,750
Tax at AGI Limit: ~5,156.25

Married Filing Jointly
Standard Deduction:12,600
Exemption: 8,000
AGI Limit 15% Bracket: 95,500
Tax at AGI Limit: ~10,312.50

That makes for effective tax of around 10.8%. Not sure what the exact taxes are since the IRS rounds it off per tax table but it should be pretty close. For folks older than 65, I believe the standard deduction is $2K higher (per person?) so just increase the AGI limits by that amount.
__________________
hnzw_rui is offline   Reply With Quote
Old 06-03-2015, 08:01 AM   #4
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 1,712
Aw Man, Are they talking about taxing retirement now? (just kidding)
__________________
gauss is online now   Reply With Quote
Old 06-03-2015, 08:02 AM   #5
Recycles dryer sheets
 
Join Date: Mar 2014
Posts: 152
Quote:
Originally Posted by hnzw_rui View Post
For 2015, under age 65.

Single
Standard Deduction: 6,300
Exemption: 4,000
AGI Limit 15% Bracket: 47,750
Tax at AGI Limit: ~5,156.10

Married Filing Jointly
Standard Deduction:9,250
Exemption: 8,000
AGI Limit 15% Bracket: 95,100
Tax at AGI Limit: ~10,312.35

That makes for effective tax of around 10.8%. Not sure what the exact taxes are since the IRS rounds it off per tax table but it should be pretty close. For folks older than 65, I believe the standard deduction is $2K higher (per person?) so just increase the AGI limits by that amount.
The Married Filing Jointly Standard Deduction is 12,600 not 9,250.

In 2015, Various Tax Benefits Increase Due to Inflation Adjustments
__________________
user5027 is offline   Reply With Quote
Old 06-03-2015, 08:31 AM   #6
Thinks s/he gets paid by the post
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 2,524
Quote:
Originally Posted by gauss View Post
Aw Man, Are they talking about taxing retirement now? (just kidding)
They are in Illinois.

... kind of

"llinois is leaving $2 billion on the table by not taxing retirement income, studies have shown. That missed revenue is escalating every year. Total retirement income in Illinois is growing by 6.5 percent a year, compared with just 1.9 percent annual growth for personal income
__________________
JoeWras is offline   Reply With Quote
Old 06-03-2015, 08:34 AM   #7
Recycles dryer sheets
 
Join Date: May 2015
Location: Charleston, SC
Posts: 197
I find the TaxCaster on TurboTax to be helpful in estimating taxes. Especially useful for maxing out a Roth Conversion.

https://turbotax.intuit.com/tax-tool...ors/taxcaster/
__________________
It's a small mind that can only think of one way to spell a word.
FiveDriver is offline   Reply With Quote
Old 06-03-2015, 08:48 AM   #8
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,465
Quote:
Originally Posted by JoeWras View Post
A short description or snippet of the linked article would be helpful to members.
__________________
MichaelB is offline   Reply With Quote
Old 06-03-2015, 09:05 AM   #9
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: Triangle
Posts: 3,218
I notice the article that JoeWras posted is dated August 2014, which was pre-election. The new IL governor is Rauner.
__________________

steelyman is offline   Reply With Quote
Old 06-03-2015, 09:58 AM   #10
Thinks s/he gets paid by the post
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 2,524
Quote:
Originally Posted by MichaelB View Post
A short description or snippet of the linked article would be helpful to members.
OK, sorry. I normally am very logical, this time I was being a smart alec. One of my poor attempts at being short, not my usual style. I have work to do.

The article is by a Chicago business writer who thinks that the fact that Illinois does not tax retirement is a terrible thing, and that Illinois should consider taxing it to get more income.

"llinois is leaving $2 billion on the table by not taxing retirement income, studies have shown. That missed revenue is escalating every year. Total retirement income in Illinois is growing by 6.5 percent a year, compared with just 1.9 percent annual growth for personal income"

Quote:
Originally Posted by steelyman View Post
I notice the article that JoeWras posted is dated August 2014, which was pre-election. The new IL governor is Rauner.
As I was saying, they are just "talking" about it. This is a 3rd rail issue and I have no idea where it is going. Although be aware, other states are more than happy to tax retirement income just fine.
__________________
JoeWras is offline   Reply With Quote
Old 06-03-2015, 10:01 AM   #11
Full time employment: Posting here.
 
Join Date: Apr 2015
Posts: 903
Quote:
Originally Posted by user5027 View Post
The Married Filing Jointly Standard Deduction is 12,600 not 9,250.

In 2015, Various Tax Benefits Increase Due to Inflation Adjustments
Whoops, my mistake. Got crosseyed with Head of Household. Apparently, I was also using the 2013 standard deduction in my spreadsheet (12,200). AGI Limit is supposed to be 95,500 (12,600 + 8,000 + 74,900).
__________________
hnzw_rui is offline   Reply With Quote
Old 06-03-2015, 12:02 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,894
Quote:
Originally Posted by JoeWras View Post
.............
"llinois is leaving $2 billion on the table by not taxing retirement income, studies have shown. That missed revenue is escalating every year. Total retirement income in Illinois is growing by 6.5 percent a year, compared with just 1.9 percent annual growth for personal income"


As I was saying, they are just "talking" about it. This is a 3rd rail issue and I have no idea where it is going. Although be aware, other states are more than happy to tax retirement income just fine.
Until a few years ago, Michigan did not tax pensions. Now they have a 3 tier tax based on how old you are. One more thing that I will not miss when I move.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 06-03-2015, 05:55 PM   #13
Recycles dryer sheets
 
Join Date: Jul 2014
Location: Undisclosed
Posts: 93
Terry, if most of your income is long term taxable gains or qualified dividends, they are taxed at 0% when your total income is within the 15% bracket.
__________________
N02L84ER is offline   Reply With Quote
Old 06-03-2015, 08:48 PM   #14
Recycles dryer sheets
 
Join Date: Nov 2014
Location: Texas
Posts: 164
I appreciate the reply Sounds like I need to do more home work.
I am still a couple of years away but want understand the details before I fire.
The knowledge in this forum is GREAT.
Thanks


Sent from my iPhone using Early Retirement Forum
__________________
Terryjm51 is offline   Reply With Quote
Old 06-03-2015, 08:58 PM   #15
Recycles dryer sheets
 
Join Date: Aug 2014
Posts: 428
Quote:
Illinois is one of just three states that exempt pension income from taxation

That may be true but is misleading. According to Kiplinger, 9 states have no income tax at all. I have also read elsewhere that this number is 7 hard to determine the date some articles found on line were published. So while Illinois exempts pensions (and other retirement income), it should be added to those that do not tax any income. When I read misleading statements like this, it is hard for me to believe anything else written in the article. BTW there are 38 states that do not tax SS at all.
__________________
CRLLS is online now   Reply With Quote
Old 06-04-2015, 08:10 AM   #16
Thinks s/he gets paid by the post
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 2,524
Quote:
Originally Posted by CRLLS View Post
That may be true but is misleading. According to Kiplinger, 9 states have no income tax at all. I have also read elsewhere that this number is 7 hard to determine the date some articles found on line were published. So while Illinois exempts pensions (and other retirement income), it should be added to those that do not tax any income. When I read misleading statements like this, it is hard for me to believe anything else written in the article. BTW there are 38 states that do not tax SS at all.
I stop reading most articles because people are always pushing an agenda, obviously or not.

Been that way forever. (See newspapers circa 1750 in the American colonies.)
__________________

__________________
JoeWras is offline   Reply With Quote
Reply


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
Taxes, Taxes. Taxes mickeyd FIRE and Money 1 02-09-2008 01:18 PM
Taxes in retirement modhatter FIRE and Money 9 06-10-2007 07:30 AM
Taxes during retirement (+ or -) smileydog FIRE and Money 3 06-06-2007 12:52 AM
Who pays more income taxes in retirement? LOL! FIRE and Money 19 12-17-2006 04:16 PM
Taxes in Retirement HockeyMike35 FIRE and Money 26 06-22-2005 06:08 PM

 

 
All times are GMT -6. The time now is 05:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.