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To Retirees, What is your effective Income Tax rate ?
06-09-2019, 08:09 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Posts: 1,969
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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.
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06-09-2019, 08:32 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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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.
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06-09-2019, 08:38 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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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)
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06-09-2019, 09:06 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,607
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Quote:
Originally Posted by copyright1997reloaded
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)
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Standard ded is 13600 if 65 and over
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Retired May 13th(Friday) 2016 at age 61.
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06-09-2019, 09:40 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by VanWinkle
Standard ded is 13600 if 65 and over
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Thanks. Missed that, I'm not there yet.
That would bring Fed tax down to $3436 from $3628.
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06-10-2019, 05:14 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Quote:
Originally Posted by cyber888
.... I'm just apprehensive about how much taxes I will end up paying, and wanted to get some idea. Thanks.
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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).
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If something cannot endure laughter.... it cannot endure.
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Retired Jan 2012 at age 56
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06-10-2019, 06:06 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,903
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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.
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06-10-2019, 06:35 AM
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#8
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Recycles dryer sheets
Join Date: Mar 2010
Location: Southern UT
Posts: 374
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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%
__________________
"Not knowing when the dawn will come, I open every door." Emily Dickinson
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06-10-2019, 06:50 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2014
Posts: 1,677
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Quote:
Originally Posted by copyright1997reloaded
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.
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If this filer lives in PA, they owe no PA income tax. Neither SS nor 1099R income is taxed in PA
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06-10-2019, 07:16 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Quote:
Originally Posted by CardsFan
.... FWIW, 64% of the income was Roth conversion money. If I did not make the conversion my Fed taxes would have been 0.
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+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
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06-10-2019, 07:18 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Quote:
Originally Posted by Philliefan33
If this filer lives in PA, they owe no PA income tax. Neither SS nor 1099R income is taxed in PA
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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
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06-10-2019, 07:42 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Jul 2002
Posts: 1,581
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Quote:
Originally Posted by Philliefan33
If this filer lives in PA, they owe no PA income tax. Neither SS nor 1099R income is taxed in PA
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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.
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06-10-2019, 08:34 AM
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#13
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Full time employment: Posting here.
Join Date: Sep 2014
Posts: 645
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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.
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06-10-2019, 08:38 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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13% including all medical/drugs/dental
Got hit with a few capital gains to increase it from 10% - takeouts for cash
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For the fun of it...Keith
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06-10-2019, 08:46 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2010
Posts: 5,862
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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).
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06-10-2019, 10:30 AM
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#16
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Recycles dryer sheets
Join Date: Nov 2012
Posts: 226
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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.
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To Retirees, What is your effective Income Tax rate ?
06-10-2019, 10:31 AM
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#17
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,473
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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 |
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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.
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06-10-2019, 11:04 AM
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#18
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Recycles dryer sheets
Join Date: Jan 2012
Location: Colorado
Posts: 254
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My effective rate is 13% fed, 3% state. Single, over 65.
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06-10-2019, 11:10 AM
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#19
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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Big difference w/ & w/o RMD.
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06-10-2019, 11:32 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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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).
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