SS Taxation (from the tax cut bill)

[RobbieB]

I want to be taxed on 100% of my SS benefits.

 

[Souschef]

I am over the RMD age, and have no control over the % that I have to take. I cannot do Roth conversions,because of the limits.
In a sense, it is a good feeling, but I hate to have to pay tax on it
For the past 5 years, my IRA balance has increased in spite of the RMD withdrawals.

 

[RobbieB]

I love to pay taxes, I love to spend, I love to be making lots of dough. Yes, I'm getting richer even as we speak, I can't spend it as fast as I make it.

I want to die broke and it's very hard work.

 

[travelover]

..........I want to die broke and it's very hard work.

I can help.

 

[Helena]

Depending on your IRA balance, you may or may not be wasting ability to pay a lower rate by(using todays brackets) not using the 10% bracket.If you have a lot of IRA assets and your RMD is high enough you "may" be forced to pay in the 15 or 25% brackets when you could have got some out at lower rates. Same with your state tax if you live in a state with state taxes.I have been micromanaging my income up to the top of the 10% bracket for a few years now, and still kick myself that I wasted a couple years by not paying any tax.YMMV

No state income tax here in Texas. For the past several years, I have been taking money out of my taxable IRA tax free [because I stay under the IRS tax exempt amount.] The more I take now... the less I have to deal with under RMD, which should be a few thousand a year higher than what I'm taking now [and hopefully the IRS tax exempt amount will be increasing annually too.]

.

 

[VanWinkle]

I want to be taxed on 100% of my SS benefits.

They will allow you to write an additional check to the Dept of Revenue for any amount you feel is appropriate over what you owe by law. You know they know how to spend it better.......

 

[Eagle43]

I am over the RMD age, and have no control over the % that I have to take. I cannot do Roth conversions,because of the limits.
In a sense, it is a good feeling, but I hate to have to pay tax on it
For the past 5 years, my IRA balance has increased in spite of the RMD withdrawals.

+1
It's too late to do anything about it. And my investments keep growing. It's a problem, but I'll manage.

 

[meierlde]

+1
It's too late to do anything about it. And my investments keep growing. It's a problem, but I'll manage.

Perhaps also said it is a good problem to have.

 

[joeea]

I want to die broke and it's very hard work.

It's not so hard if you have help.

Let me volunteer my services...

 

[CRLLS]

I am over the RMD age, and have no control over the % that I have to take. I cannot do Roth conversions,because of the limits.
In a sense, it is a good feeling, but I hate to have to pay tax on it
For the past 5 years, my IRA balance has increased in spite of the RMD withdrawals.

I'm curious. What "limits" prevent you from doing a Roth Conversion? I'm in full evaluation mode on doing the Roth conversion, paying taxes from the 401K/IRA and am unaware of any income limits. Are there others I am unaware of?

 

[travelover]

............I want to die broke and it's very hard work.

I can help.

It's not so hard if you have help.

Let me volunteer my services...

Hey, get in line!

 

[pb4uski]

I'm curious. What "limits" prevent you from doing a Roth Conversion? I'm in full evaluation mode on doing the Roth conversion, paying taxes from the 401K/IRA and am unaware of any income limits. Are there others I am unaware of?

+1 To my knowledge you can do Roth conversions after 70 1/2 if you want to... you just have to do your RMD as a withdrawal first and then you can do as much or as little as you want.

It was not clear to me what the constraint that he was referring to was either.

 

[jimnjana]

You are substantially correct. The taxes raised by the first 50% are credited to the SS Trust Fund. So, from a SS funding perspective, this is exactly like a benefit cut.

However, the taxes raised by the additional 35% go to the Medicare Trust Fund.

Nice history here: https://www.ssa.gov/history/taxationofbenefits.html

Thanks for posting. Never knew the credit back to the trust fund was taking place.

 

[CRLLS]

+1 To my knowledge you can do Roth conversions after 70 1/2 if you want to... you just have to do your RMD as a withdrawal first and then you can do as much or as little as you want.

It was not clear to me what the constraint that he was referring to was either.

Agreed. One cannot place RMD's into tax advantaged retirement accounts like a Roth. But one can take up to all that remains and convert it t a Roth. Never having to take RMDs again


For example, if I had $1,000,000 in an IRA and was 71 years old, I would be required to take ~4% out as RMD's and then, if I wanted to, convert the remaining $960,000 (minus taxes, assuming you were paying tax with that same money) into Roth.

 

[pb4uski]

And you would have a really really big tax bill that year!