Retirement Tax Happiness, right?

[gstillson]

I live in Washington state, what's state income tax

9.8% sales tax called and says "hi!"

 

[Shabby]

9.8% sales tax called and says "hi!"

LMAO!
I couldn't answer the phone because "Avg $726k Home Price" was on the line.
I laugh so I don't cry.

 

[imoldernu]

You'd want to run some sort of tax-forecasting software to estimate your liability, but it's quite possible to never pay taxes again.

One of the long-time members of this forum prides himself on that achievement:
https://www.gocurrycracker.com/never-pay-taxes-again/
https://www.gocurrycracker.com/go-curry-cracker-2017-taxes-feie/ (and its related links at the bottom)

FWIW, while we have always filed both state and federal taxes, we have not had to pay any taxes since 1995. This year, for the first time, we won't bother filing, as, based on our finances, not necessary.

Obviously, not rich, but careful withdrawals and management over the past 24 years kept us under the taxable minimum.

 

[SecondCor521]

That's it, thanks!
Not to start any political chatter, but retired people must really have a big interest in any changes in the tax system with respect to interest, dividends, etc. As I prepare for this adventure and do all my models based on not taxing $51k of my earnings, I will be really annoyed if it gets changed in 2020+.

I've always had an interest in taxes, so I pay attention to it more than the average bear. Now that I'm retired I have more time to devote to reading about the topic. I think pb4uski used to do taxes or be an accountant or something in his working life.

IIRC, the current system is in place through about 2025, although obviously any new tax laws could change that to any degree. I doubt I'll get annoyed, because (a) I have little to no control over what happens other than voting, which I do, and (b) I'm retired...my blood pressure is pretty low about almost everything these days. Hopefully you'll still be retired then and have a similar experience/reaction.

 

[pb4uski]

I only see $39,376 for 2019 qualified dividends before they are taxed for a single filer? What am I missing to get the $51,575?

2019 0% LTCG ceiling for a single:...... $39,375
2019 standard deduction for a single:.... 12,200

Total.................................................$51,575

 

[RetireAge50]

Retirement tax happiness is mostly a yes for me. We also live in Washington and live of pension income of 35k and about 50k from cash/MM. Last year paid $1,171 in Federal taxes. The state got $5,354 plus whatever sales tax we paid (not tracked).

 

[Chuckanut]

Retirement tax happiness is mostly a yes for me. We also live in Washington and live of pension income of 35k and about 50k from cash/MM. Last year paid $1,171 in Federal taxes. The state got $5,354 plus whatever sales tax we paid (not tracked).

If Washington has no income tax what was the $5,354? Property? Car fees?

 

[gstillson]

If Washington has no income tax what was the $5,354? Property? Car fees?

Might be a tax on soda straws or something

 

[Which Roger]

As mentioned, if you have 401k and/or tIRA balances, withdrawals or conversions might be wise. If you target zero tax rate now, you might be setting yourself up for the RMD tax torpedo later. To decide "properly", all years need to be modeled. I suggest i-orp as a data point, which usually shocks people by modeling more tax earlier, but the plan will maximize spending if reality ends up matching your plan assumptions.

Agreed. All years need to be considered, although the future must be discounted appropriately.
Also, the tax equation changes a lot for those who plan on giving away what they don't need later in life. I'm too young for that, but that's likely what I'll do when I get up in years. It would be interesting to get some input from others who are in a similar situation.

 

[RetireAge50]

If Washington has no income tax what was the $5,354? Property? Car fees?

Yep. Property and expensive car and motorcycle tabs.