To Retirees, What is your effective Income Tax rate ?

[cyber888]

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.

 

[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.

 

[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)

 

[VanWinkle]

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

 

[copyright1997reloaded]

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.

 

[pb4uski]

.... 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).

 

[CardsFan]

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.

 

[blueskyk]

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%

 

[Philliefan33]

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

 

[pb4uski]

.... 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.

 

[pb4uski]

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.

 

[RE2Boys]

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.

 

[Taxman59]

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.

 

[kcowan]

13% including all medical/drugs/dental

Got hit with a few capital gains to increase it from 10% - takeouts for cash

 

[brett]

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).

 

[geeky_grrl]

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.

 

[W2R]

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.

 

[arky]

My effective rate is 13% fed, 3% state. Single, over 65.

 

[gerntz]

Big difference w/ & w/o RMD.

 

[copyright1997reloaded]

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).

 

[Dtail]

Currently pay zero federal (state is naturally zero), just due to MAGI management and DGF has her own income which is also zero federal.
Next year one of us will have to pay federal. Haven't figured out this first world problem yet.

 

[Philliefan33]

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.

Yes, good catch. I should have said “1099R income with code 7 in box 7 is not taxable, as long as it is not from a life insurance policy or annuity”

That was one of my peeves while doing taxes for seniors...trying to suss out if there was a purchased annuity.

 

[Splash]

Effective tax rate of 3.9% Federal, 4.9% WI.

Not drawing SS or pension yet.
Managing income for ACA.
Roth Conversions as % of taxable income = 79% for Fed, 75% for WI.

 

[RetireAge50]

2018 was our first full year of retirement. We paid 1.9% of AGI federal taxes. Our last dollar was taxed at 10%. The next dollar would have been taxed at 24.5%

 

[scrabbler1]

I turned 56 earlier this year, so I am living on investment income only in the 10 years I have been retired. Much of it is either lower-taxed stock fund dividends, LTCGs, and tax-free muni bond dividends, so my average tax rate is in the 3%-5% range, each for federal and state. It was 5% for each in 2018 because of a large, year-end LTCG distribution.