Social Security still makes up a large chunk of the retirement income pie (about 35% for the average American). It may come as a surprise to some that up to 85% of a person’s benefit could indeed be added to your taxable income. In fact, about 40% of Americans pay taxes on their Social Security benefit. So how do you determine if your Social Security payments are taxable?...
Tax Breaks for the Newly Retired
Because federal tax law reaches deep into all aspects of our lives, it’s no surprise that the rules that affect us change as our lives change. This can present opportunities to save or create costly pitfalls to avoid. Being alert to the rolling changes that come at various life stages is the key to holding down your tax bill to the legal minimum. Check out these issues that face the newly retired.
Timing Tax Payments in Retirement
For most of us, during our working years we give little thought to paying taxes due on income, other than knowing that a lot of our gross pay disappears because of this. In fact our employer has set up a system to withhold what we owe automatically, so we don’t have to make the payments ourselves. So what happens when a retiree leaves the workforce and the system that has been set up to pay taxes on any income received?...
