Poll: Your 2021 Taxes Federal Tax Rate

[kgtest]

Fed rate was 2.75% on over 250k of income. Being the business owner was key.

[TheWizard]

Quote:

Originally Posted by Out-to-Lunch I am genuinely curious: are you saying that your tax rates while working were lower than they are now?

I'm not perryinva, but my Federal income tax DOLLAR AMOUNT has been higher every year in retirement, since 2013, than when working.

I was in the 28% bracket when when working and the 24% bracket the past few years.
That sounds like an improvement, but it's not, due to the $10k limit on SALT.

I paid more income tax for 2021 than any previous year.
I expect 2022 will be slightly higher than 2021.
And so it goes...

[5Miler]

Effective Fed rate was 8.41% while state rate was zero. Georgia is so kind to retirees.

DGF effective Fed rate was 2.3% and state rate also zero. Mostly living off of capital gains and ROTH to manage income for ACA subsidy.

Fed was up from 2020's 6.4% rate as I did a small Roth conversion of $20K last year. It makes no dent in my IRA but I figured out how much I could convert using my already withheld taxes to pay the Federal taxes as I don't have large amounts of after tax money laying around to use. So I gave up my refund to convert a bit at 12%. Seemed like a fair trade.

[tmm99]

I live in Ontario, Canada. Around 14% effective for fed. Overall (state/province included), the Canada side says my marginal rate was about 43%, which is insanely high IMO as my total income was less than $100K CAD (about 78K USD)...

[Sunset]

Quote:

Originally Posted by tmm99 I live in Ontario, Canada. Around 14% effective for fed. Overall (state/province included), the Canada side says my marginal rate was about 43%, which is insanely high IMO as my total income was less than $100K CAD (about 78K USD)...

But it includes your health insurance as well.

Here in USA , and on Medicare the cost is $6,700 for a couple, which is about 8.6% of a $78,000 income.

[tmm99]

Quote:

Originally Posted by Sunset But it includes your health insurance as well. Here in USA , and on Medicare the cost is $6,700 for a couple, which is about 8.6% of a $78,000 income.

Yeah there is always that... So basically, there is no "free" healthcare...

[Gumby]

Our pension and SS income put us in a combined fed/state marginal bracket of 27.5% right out of the gate, so any money coming out of tIRA/401k is taxed at 27.5%. And that constitutes the majority of our portfolio. Our Roths are only about 11% of portfolio and after tax is about 20%. Still, I can't complain too much. The money we contributed to those tIRA/401k accounts would have been taxed at a combined rate of 33.5% minimum, and in some years at 47.6%

[PointBreeze]

2.90% - LBMM and aggressively managing my MAGI to keep my ACA premiums low.

[kcowan]

Quote:

Originally Posted by tmm99 Yeah there is always that... So basically, there is no "free" healthcare...

And there are also extra taxes on liquor/wine, gasoline, home heating fuel, and tobacco to cover social services. Hard to compare state to state (province).

[Koolau]

Quote:

Originally Posted by Sunset But it includes your health insurance as well. Here in USA , and on Medicare the cost is $6,700 for a couple, which is about 8.6% of a $78,000 income.

Where does the $6700 figure come from? Are you including more than the monthly premium? If I figured it correctly that would be about $4100. What am I missing?

[Koolau]

Quote:

Originally Posted by tmm99 Yeah there is always that... So basically, there is no "free" healthcare...

Please forgive me for repeating myself - as I've said this before on the forum: There is NO free healthcare, anywhere. It's only a question of who pays and who doesn't. Returning you now...

[TheWizard]

Quote:

Originally Posted by Koolau Where does the $6700 figure come from? Are you including more than the monthly premium? If I figured it correctly that would be about $4100. What am I missing?

That $4100 is just for Part B.
Part D for prescription drugs is what you're missing...

[Koolau]

Quote:

Originally Posted by TheWizard That $4100 is just for Part B. Part D for prescription drugs is what you're missing...

Thanks for the clarification. We don't do that so I guess YMMV.

[tmm99]

Quote:

Originally Posted by kcowan And there are also extra taxes on liquor/wine, gasoline, home heating fuel, and tobacco to cover social services. Hard to compare state to state (province).

True, some consumer products are very expensive here. Huge import fees as well.

[tmm99]

Quote:

Originally Posted by Koolau Please forgive me for repeating myself - as I've said this before on the forum: There is NO free healthcare, anywhere. It's only a question of who pays and who doesn't. Returning you now...

Yep, you can say that again. (I agree!!)

[Sunset]

Quote:

Originally Posted by Koolau Where does the $6700 figure come from? Are you including more than the monthly premium? If I figured it correctly that would be about $4100. What am I missing?

Quote:

Originally Posted by TheWizard That $4100 is just for Part B. Part D for prescription drugs is what you're missing...

I just used our numbers: Part B and included the supplemental part G

(170×12)+(110×12) x 2 people = $6,720 I might be off a few dollars but close enough.

Adding Part D this year for both would make the total: $7,000

It's true the bare medicare number is much less, but I'm not going to take the unlimited risk of not having the 20% covered, so in my mind its all part of being on Medicare.

[Out of Steam]

Quote:

Originally Posted by Dash man Our later working years put us into the 39% bracket, so doing Roth conversions to the top of the 24% bracket and even into the 32% bracket works for us.

Because my wife is working more than expected, my Roth conversion will be mostly at the 22% tax rate for 2022. I'm still comfortable with it still being a good idea, mostly because of IRMAA for the survivor of either my wife or I. IRMAA would never be a thing for us as a couple under current rules.