Where can a 70-year-old buy the least expensive life annuity?
Interesting article - any thoughts? How long can this loophole last?
K.
Interesting article - any thoughts? How long can this loophole last?
K.
So I'll just wait until I am 70, unless the Dow goes to 5000 and I really want all the cash availability I can find.
I am by nature a patient person so this is no proble for me psychologically.
Ha
So I'll just wait until I am 70, unless the Dow goes to 5000 and I really want all the cash availability I can find.
Ha
....
One thing I hadn't seen discussed is the taxes you pay on SS between 62 and 70. When you pay it all back, you'd have to refile your last few tax returns to get it back but some would be too old.
This topic is discussed in Kotlikoff and Burns' Spend 'Til the End. They say you can recover the taxes through a deduction or credit. They are gung-ho on it and I definitely will keep it in mind.
Download IRS Publication 17 (it is a pdf) and look for the instructions for line 71 of the 1040. You have a choice deduction on Schedule A OR a Credit on Line 71 for ALL taxes paid on past SS benefits repaid. Simple and no amended returns are necessary (entry in tax year of repayment).
BTW this has been discussed EXTENSIVELY here in the past. The search option should bring up A LOT on the subject. (There are at lease 2 members of this board that have done it or are still in the process).
Download IRS Publication 17 (it is a pdf) and look for the instructions for line 71 of the 1040. You have a choice deduction on Schedule A OR a Credit on Line 71 for ALL taxes paid on past SS benefits repaid. Simple and no amended returns are necessary (entry in tax year of repayment).
Pub 17 -page 81 - Section titled - Repayments More Than Gross Benefits.
-Robert K
Count me in. Of course, since I'm married we're planning on the 62/66/70 "split". That is, my wife takes her's at 62, I file spousal against her at her FRA age 66, and then I take mine at 70.
For those who may be saying (to the "spit" program) "huh?" here's an article on the technique:
The Baby Boomer's Guide To Social Security - WSJ.com
- Ron
Could you pls clarify......not sure I am looking in the right place but Pub 17
generally has discussions by topic, not by line number of 1040 so I am not sure what you are reading. Pg number of Pub 17 would be useful.
If I look instead at the instructions for Form 1040 booklet, the instructions for Line 71 talk about a Refundable Credit for Prior Year Minimum Tax.
This doesn't sound to me like it is related to prior yr tax on SS . Am I
misunderstanding something?
Even if it is as you say, calculating the past taxes on SS doesn't sound trivial unless you are in the regime where you paid no taxes (because of low income) or where you paid taxes on 85% of the SS (because of high income). For the region in between , it's more complicated.
Sorry for the error in line number it is 70 versus 71. Really not too difficult to calculate the Deduction as that would come from the SSA 1099 SM that the SS gives you in the year of repayment. The calculation for the Credit should be available from (using IRS 1040 for Year 2007 as an example) line 20b of the 1040. Generally you just recalculate what the taxes would have been WITHOUT the entry on 20b and the difference would be your Credit for that year. You do the same for each year you had taxable SS benefits then total it up and put it on line 70 (with the annotation they specify in publication 17; "I.R.C. 1341"). While the Deduction is easier to calculate, IMO the Credit will result in the larger return of Taxes Paid.
That looks like 10 months, not 4 months of premiums to me.Received notification/bill from MEDICARE to pay 4 months of premiums (1/8-10/31/2008.
1 Aug to 31 Oct = 4 months.Hi OAG,
I am having trouble following your post. For example , you wrote: That looks like 10 months, not 4 months of premiums to me.
Also, for how many months will you not have received SS payments? How does SS make up for the months you didn't receive SS payments?
Thanks,
Robert K