Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
To Retirees, What is your effective Income Tax rate ?
Old 06-09-2019, 08:09 PM   #1
Full time employment: Posting here.
 
Join Date: Aug 2013
Posts: 657
To Retirees, What is your effective Income Tax rate ?

Assuming you live in a State where Social Security is only partially taxed or not taxed, and you are living on an income of $50,000 - $60,000 a year, how much total Income Tax yearly ?

So, if your social security income and 401K/IRA withdrawals is $60,000, for example, do you pay about $6000 in income tax or more ?

I'm just apprehensive about how much taxes I will end up paying, and wanted to get some idea. Thanks.
__________________

__________________
No to consumerism, Living a simple life, enjoying the experience - not the material stuff
cyber888 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 06-09-2019, 08:32 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,002
I just did a quick calculation: A single filer who gets $30K in social security and $30K in 1099R income (60K total) would owe $3753 in Federal taxes.
__________________

copyright1997reloaded is offline   Reply With Quote
Old 06-09-2019, 08:38 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,002
Additional Detail:
1099R Income $30,000.00
Social Security $30,000.00 but taxable amount is $13,850.
Standard Deduction is $12,000.00

So 30K + 13,850 = $43,850.
Minus std deduction of $12,000 = $31,850.
Tax on 31850 = $3628 using 2019 tax tables (I think).

Tax on additional $1000.00 in 1099R Income: $229, so 22.9% marginal (because some more of the social security becomes taxable)
copyright1997reloaded is offline   Reply With Quote
Old 06-09-2019, 09:06 PM   #4
Thinks s/he gets paid by the post
VanWinkle's Avatar
 
Join Date: Oct 2017
Location: Brighton
Posts: 1,078
Quote:
Originally Posted by copyright1997reloaded View Post
Additional Detail:
1099R Income $30,000.00
Social Security $30,000.00 but taxable amount is $13,850.
Standard Deduction is $12,000.00

So 30K + 13,850 = $43,850.
Minus std deduction of $12,000 = $31,850.
Tax on 31850 = $3628 using 2019 tax tables (I think).

Tax on additional $1000.00 in 1099R Income: $229, so 22.9% marginal (because some more of the social security becomes taxable)
Standard ded is 13600 if 65 and over
__________________
Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote
Old 06-09-2019, 09:40 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,002
Quote:
Originally Posted by VanWinkle View Post
Standard ded is 13600 if 65 and over
Thanks. Missed that, I'm not there yet.

That would bring Fed tax down to $3436 from $3628.
copyright1997reloaded is offline   Reply With Quote
Old 06-10-2019, 05:14 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 21,805
Quote:
Originally Posted by cyber888 View Post
.... I'm just apprehensive about how much taxes I will end up paying, and wanted to get some idea. Thanks.
Your best bet is to do a pro forma tax calculation as if you were retired. There are a number of tax calculators out on the internet. If you prepare your own return using Turbo Tax, there is a What-If Worksheet that you can use. Take out your wrok earnings and then add in any pensions and SS and make any other applicable adjustments.

But to answer your question, for us for 2018... 6.5% federal and 2.9% state....9.4% in total... that is with income at the top of the 0% capital gains tax bracket. And in each case it is total tax (after tax credits... line 15) divided by total income (line 6).
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is offline   Reply With Quote
Old 06-10-2019, 06:06 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: St. Charles
Posts: 1,223
No SS yet. And spending primarily after tax money.

Fed: 5.8%
State (MO): 3.6%

FWIW, 64% of the income was Roth conversion money. If I did not make the conversion my Fed taxes would have been 0.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is offline   Reply With Quote
Old 06-10-2019, 06:35 AM   #8
Recycles dryer sheets
blueskyk's Avatar
 
Join Date: Mar 2010
Location: Southern UT
Posts: 78
DH takes SS, I do not. Remaining income from investments and 1099MISC
receipts (50/50 split)

Fed Income: 5% + Fed Self Employment on 1099MISC: 5% = 10% for “Fed”

State (UT): 4.9%
__________________
"If, then, I were asked for the most important advice I could give, that which I considered to the most useful to the men of our century, I should simply say: in the name of God, stop a moment, cease your work, look around you." Leo Tolstoy
blueskyk is offline   Reply With Quote
Old 06-10-2019, 06:50 AM   #9
Thinks s/he gets paid by the post
Philliefan33's Avatar
 
Join Date: Oct 2014
Posts: 1,036
Quote:
Originally Posted by copyright1997reloaded View Post
I just did a quick calculation: A single filer who gets $30K in social security and $30K in 1099R income (60K total) would owe $3753 in Federal taxes.


If this filer lives in PA, they owe no PA income tax. Neither SS nor 1099R income is taxed in PA
Philliefan33 is offline   Reply With Quote
Old 06-10-2019, 07:16 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 21,805
Quote:
Originally Posted by CardsFan View Post
.... FWIW, 64% of the income was Roth conversion money. If I did not make the conversion my Fed taxes would have been 0.
+1 but 62% in our case.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is offline   Reply With Quote
Old 06-10-2019, 07:18 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 21,805
Quote:
Originally Posted by Philliefan33 View Post
If this filer lives in PA, they owe no PA income tax. Neither SS nor 1099R income is taxed in PA
According to their profile they are in NC.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is offline   Reply With Quote
Old 06-10-2019, 07:42 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2002
Posts: 1,226
Quote:
Originally Posted by Philliefan33 View Post
If this filer lives in PA, they owe no PA income tax. Neither SS nor 1099R income is taxed in PA
Just a nit, not applicable for OP, but do not wish any other readers in future to be misled. The above statement is true probably over 90% of time.

But not all 1099R income is not taxable by PA. Early retirement plan distributions may be fully or partially taxable. Annuity income not purchased through a retirement plan IS taxable by PA.
RE2Boys is offline   Reply With Quote
Old 06-10-2019, 08:34 AM   #13
Full time employment: Posting here.
Taxman59's Avatar
 
Join Date: Sep 2014
Posts: 563
Married, living on 6-7k per month using cash, cap gains dividends and some taxable interest. Fed Tax under $1k, NC tax $2k. Note, OP can manage the taxable income by using cap gains. Overshoot and raise cash one year, stay low the next.
Taxman59 is offline   Reply With Quote
Old 06-10-2019, 08:38 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 6,802
Send a message via Skype™ to kcowan
13% including all medical/drugs/dental

Got hit with a few capital gains to increase it from 10% - takeouts for cash
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 06-10-2019, 08:46 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Apr 2010
Posts: 2,743
me: 17 percent dw: 9 percent. average: 12 percent on combined income.

Some variances from year to year.

The incremental rates are much higher. 20 and 26 percent respectively.

These numbers include universal health care and some blue cross prescription coverage in our jurisdiction(s).
brett is offline   Reply With Quote
Old 06-10-2019, 10:30 AM   #16
Dryer sheet aficionado
 
Join Date: Nov 2012
Posts: 39
My income is all dividends and cap gains from after-tax investments.

Fed - 3.3%
Oregon - 7.3%

I need to move to a lower tax state once my SO gets over his OMY syndrome.
geeky_grrl is offline   Reply With Quote
To Retirees, What is your effective Income Tax rate ?
Old 06-10-2019, 10:31 AM   #17
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 42,167
To Retirees, What is your effective Income Tax rate ?

Here are my effective income tax rates for every year since my 11/2009 retirement:

INCOME TAX PERCENTAGES OF AGI:

year state federal total comments
2010 2.0% 7.5% 9.5%
2011 2.0% 8.6% 10.6%
2012 2.2% 8.4% 10.6%
2013 2.3% 7.2% 9.5%
2014 2.1% 9.4% 11.5% started SS mid-year
2015 2.1% 10.9% 13.0% sold funds in taxable to buy house
2016 1.1% 7.6% 8.7%
2017 1.5% 9.1% 10.6%
2018 2.3% 11.0% 13.3% unusually high capital gains, also started RMDs

When I was planning for retirement, I just flat out did not believe the low income tax rates that retirees were claiming on this forum. So, I used a 25% tax rate in my plans. Oh well, I just apply the excess to buying useless doo-dads on Amazon. Wheee!!! Wahoo! Whoopee!

Louisiana is kinder when taxing retirees than some states, although Alabama has us beat IIRC.

Something that you all have probably noticed is that some of our members pay 0% tax all the time! I suppose that either they manipulate income to do that, or else they have a low income in the first place. As for me, I'd rather just go ahead and pay whatever taxes that TurboTax tells me I should pay, and then pursue other interests. Blow That Dough.
W2R is offline   Reply With Quote
Old 06-10-2019, 11:04 AM   #18
Recycles dryer sheets
arky's Avatar
 
Join Date: Jan 2012
Location: Colorado
Posts: 251
My effective rate is 13% fed, 3% state. Single, over 65.
__________________
Don't you know that dynamite always blows down ? --- Moe to Curly
arky is offline   Reply With Quote
Old 06-10-2019, 11:10 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Apr 2011
Posts: 2,375
Big difference w/ & w/o RMD.
gerntz is offline   Reply With Quote
Old 06-10-2019, 11:32 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,002
To make retirees here feel better about your taxes, my federal effective rate (as a % of AGI) since 2002 is 20.1% and 16.7% since my retirement in 2009.

I am slowly going through old financial papers as I am trying to have my spreadsheet have summary data since I started working (long before 2002).
__________________

copyright1997reloaded is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 2 (0 members and 2 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
What is Your Effective Tax Rate? mickeyd FIRE and Money 50 03-16-2016 02:57 PM
capital gains: is there an effective tax rate? mrfeh FIRE and Money 33 07-23-2013 07:51 PM
Poll: What is your effective Federal income taxes paid / AGI rate? LOL! FIRE and Money 45 08-21-2012 09:22 AM
Tax Bracket vs. Effective rate ratface FIRE and Money 30 03-29-2009 09:16 AM
Heres a good one...whats your effective tax rate cute fuzzy bunny FIRE and Money 47 04-07-2006 12:10 PM

» Quick Links

 
All times are GMT -6. The time now is 02:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.