Armed Polite Society

Main Forums => The Roundtable => Topic started by: Ben on March 28, 2021, 09:56:30 AM

Title: Retirees With Average $36K Income Pay the Most Taxes
Post by: Ben on March 28, 2021, 09:56:30 AM

Percentage-wise. I don't know all the assumptions they made in their model, so there might be some bias. Nevertheless, looking at both retirement income and retirement account numbers in the article, these look to be people who were better than average in preparing for retirement regarding creating a modest, workable retirement income.

I wonder how many of them were expecting this tax burden? At $36K, it's the difference between paying the bills and paying the bills plus being able to do at least a little fun stuff.

https://money.yahoo.com/retirees-pay-the-most-in-taxes-175434021.html

Title: Re: Retirees With Average $36K Income Pay the Most Taxes
Post by: MillCreek on March 28, 2021, 10:23:24 AM

My handy HR Block software tells me that we paid a bit over $ 42K in Federal income taxes last year.  Hmm.

Title: Re: Retirees With Average $36K Income Pay the Most Taxes
Post by: grampster on March 28, 2021, 10:55:35 AM

We paid 11% of our AGI for 2020.  We don't itemize any more.  Nothing to itemize any more except property taxes and charitable contributions. 

Title: Re: Retirees With Average $36K Income Pay the Most Taxes
Post by: HankB on March 28, 2021, 02:53:59 PM

Quote from: grampster on March 28, 2021, 10:55:35 AM

We paid 11% of our AGI for 2020.  We don't itemize any more.  Nothing to itemize any more except property taxes and charitable contributions.

Take a look at "bundling" your deductions into alternate years. For example, I paid my 2019 property taxes in Jan 2020, and my 2020 property taxes in Dec 2020 - so I had twice my annual property taxes to deduct in 2020. (No penalty from the local taxing districts for doing this.) Maybe it will work for you, maybe it won't - but it's worth looking at.

Title: Re: Retirees With Average $36K Income Pay the Most Taxes
Post by: grampster on March 28, 2021, 05:21:56 PM

Quote from: HankB on March 28, 2021, 02:53:59 PM

Take a look at "bundling" your deductions into alternate years. For example, I paid my 2019 property taxes in Jan 2020, and my 2020 property taxes in Dec 2020 - so I had twice my annual property taxes to deduct in 2020. (No penalty from the local taxing districts for doing this.) Maybe it will work for you, maybe it won't - but it's worth looking at.

The standard deduction for couples for 2020 was $24,800.  Between property taxes and charitable contributions we'd have only about half of that if we itemized.  If I did as you mentioned, I'd still be way short to itemize.  Because of Trump's tax reform, being at 11% is lower than I've ever paid.