How much are withheld taxes on a mega-corp pension?

omni550

Thinks s/he gets paid by the post
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I've got a questoon I don't recall seeing asked here.

Does anyone know what the federal taxes are that are withheld on a mega-corp pension?

I think that they stop taking out SS and Medicare. Anything else?

Assuming the gross pension is $30K -- what is the net amount? Assume that the recipient is single, no dependents.

Thanks,

omni
 
Just use the same TurboTax program that you just used to do your taxes to figure this out.

With $30K of taxable income, standard deduction, single, you would owe about $2650 in taxes.
 
LOL! said:
Just use the same TurboTax program that you just used to do your taxes to figure this out.

With $30K of taxable income, standard deduction, single, you would owe about $2650 in taxes.

That's about the amount that my pension will start at (DB w/ COLA), and I worked through the taxes on it and it came up right in that neck of the woods. I went and talked to a friend of mine who's a CPA and used to my taxes several years ago, and he punched in the numbers and came up with about the same amount that I did.....$8 difference!

Other than the Fed tax, nothing else is taken out of my pension except my health ins premium. Mine is state tax exempt....YEA!!! :D
 
omni550 said:
I've got a questoon I don't recall seeing asked here.

Does anyone know what the federal taxes are that are withheld on a mega-corp pension?
Is your question how much will the corp send to IRS? I assume that will vary depending on the size of the pension and whether they use an exemption number provided by you. Or are you actually interested in the taxable portion of a pension? If you paid into the DB pension fund with dollars from your taxed salary then the already taxed portion of the pension is prorated based on life expectancy tables. For Federal pensions, OPM sends you a W2 like form (can't remember the #) that shows the taxable amount. Mine is something like 90%.
 
I get a 1099-R from my State pension, I have to pay federal and state income tax on all of it except a couple hundred dollars that I had contributed with post tax dollars.
 
I pay quarterly estimated payments so I don't have taxes withheld from my pension check. I use a tax program to figure my estimated payments.
 
Not sure if your pension will allow you to set the withholding on your pension. Mine allows me to go on the internet (or the phone) and set up an amount of withholding for Federal Taxes ABOVE the base amount they tell me they will withhold. Knowing my tax situation, year to year, almost to the dollar it is simple to set the ADDITIONAL withholding amount and I NEVER have to resort to the Quarterly payments (which IMO are just a unnecessary complication). Although you say withholding is unnecessary for STATE Taxes on the pension, if you have other States taxable income you will want to check that closely as if you do not withhold anything for STATE taxes, and you could owe them; the states are getting hungry for taxes, interest and penalties (although IMO they always were/are).

Of course once you get done with one year you can just set your withholding to the amount of taxes you were required to pay in the past year (unless you are a very high income person, which means you may have to send them 110% of the taxes for last year) to stay out of the penalty and interest arena.
 
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