Tax brackets

[Appatite]

Probably been asked and answered but by asking again and creating a dialogue, we all become more familiar with each other. So...

In a couple of decades I hope to retire. Let's see, I will have my pension, my wifes pension, saved cash and TSP withdraws. A few years later I will receive SS and then my wife will receive SS. There will also be investment income.

The question is, what out of these, creates taxable income and bumps me into higher tax brackets? Will SS affect income, if it still exists? Are pensions income?

 

[Boghie]

Appatite,

I am not a tax professional so take this for what it is worth...

Income Taxed:

Pensions - Completely taxable as ordinary income
TSP Withdraws - Completely taxable as ordinary income
Investment Income - Completely taxable as ordinary income
Investment Capital Gains - Taxed at the capital gain rate, does not bump
Investment Dividend Income - Currently, taxed at capital gain rate, does not bump?​

Partial Income Taxed:

Social Security Income - Currently 1/2 of it is taxed once you exceed Alpo Meal Deal in other retirement income.​

Taxed at Earning Point:

Saved Cash - Already taxed.
Roth Accounts - Already taxed.​

Expect enhancements (political jiggering) to Social Security to promote more taxation. President Clinton opened up 1/2 of Social Security to taxation - in twenty years who knows.

If we get the joy of a 'wealth tax' than your saved cash will be taxed again. Maybe even your Roth accounts.

President Obama tried to tax dividend income as ordinary income in this last effort. Will he succeed in 2012?


So, to summarize, almost everything is income and will bump you toward a Progressive Heaven.

Probably been asked and answered but by asking again and creating a dialogue, we all become more familiar with each other. So...

In a couple of decades I hope to retire. Let's see, I will have my pension, my wifes pension, saved cash and TSP withdraws. A few years later I will receive SS and then my wife will receive SS. There will also be investment income.

The question is, what out of these, creates taxable income and bumps me into higher tax brackets? Will SS affect income, if it still exists? Are pensions income?

 

[burrocrat]

sounds like we got us a tax problem here.

or is it a spending problem?

 

[Appatite]

Well, as I looked it up I appear to want to be somewhere in the 68,000 to 132,000 per year area otherwise I hit the next bracket, right? So that actually comes out to the 25% bracket but I am actually paying about 19.5%.

I guess the up side is that I won't pay SS taxes.

 

[Boghie]

Well, as I looked it up I appear to want to be somewhere in the 68,000 to 132,000 per year area otherwise I hit the next bracket, right? So that actually comes out to the 25% bracket but I am actually paying about 19.5%.

I guess the up side is that I won't pay SS taxes.

Your tax rates cannot be known now for the future. If Congress hadn't pushed back, you would have been in either a 28% or 33% tax rate. That was where your tax bracket was heading without exending the 'Tax Cuts for Plutocrat Bankers, Warmongers, and Child Molesters'.

If Howard Dean becomes President and a highly progressive 'Soak the Rich' desire hits the masses than you might find yourself in a 90% tax bracket. James seems to like that bracket. Actually, maybe just 70% for you new rich types . And, the nice thing about our current system is that we can no longer deduct interst on credit cards and car payments and can no longer have money losing businesses as tax havens. So, unlike the pre-Kennedy 70% bracket with all the writeoffs you could simply pay 70%.

If you have everything in taxable accounts than you will just pay and pay some more. But, if you have enough to survive a Carter Presidency than you can hold your taxable assets till a Reagan comes along.

Reagan always comes along - see 2010 and 2012.

LateR