Taxes on traditional IRA withdrawals

[queasy27]

I've been researching this online using estimated tax calculators and made myself even more confused. Any advice appreciated!

With SS income of $20K a year and no other income, is it possible to calculate how much tax I'd owe on traditional IRA withdrawals of $5K and $10K a year?

Age 67 if that matters.

[papasetti82]

https://www.ssa.gov/planners/taxes.html

[BK001]

Here is an article that may prove helpful especially the link for the worksheet to calculate Social Security tax liability.

Is Social Security Taxable? (2018 Update) - SmartAsset (https://smartasset.com/retirement/is-social-security-income-taxable)

[retiredguy123]

I've been researching this online using estimated tax calculators and made myself even more confused. Any advice appreciated!

With SS income of $20K a year and no other income, is it possible to calculate how much tax I'd owe on traditional IRA withdrawals of $5K and $10K a year?

Age 67 if that matters.
I would recommend you buy Turbotax Basic ($29.99 from Amazon or Staples). Then, you can plug in any combination of income options you want and also file your taxes at the same time.

[gatorbill1]

probably nothing after standard deduction

[TomPerry]

Based on $20,000 of SS income and $15,000 IRA income, wit no other income, you won't have a tax liability.

[Bloom&Company]

Give me a call, no charge, I will explain it to you. Bob Bloom CPA 425 941 5224 I am available off and on tomorrow, leave me your number if I do not answer when you call.

[queasy27]

Based on $20,000 of SS income and $15,000 IRA income, wit no other income, you won't have a tax liability.

Thanks. That seems to be the agreed outcome using all online tax estimators, but other sites say that half my SS would be taxable, for a taxable income of $25K and liability at the 10% level.

I prefer to believe the tax calculators!

I've used H&R Block online since it was introduced and will again this year, but I'm trying to figure out if it's better to withdraw $5K this year and $10K next, or just do the entire $15K next year.

[Bloom&Company]

Just give me a call. Continue using your software. I can just discuss it with you so you feel confident in your decision.

[rjm1cc]

I would recommend you buy Turbotax Basic ($29.99 from Amazon or Staples). Then, you can plug in any combination of income options you want and also file your taxes at the same time.

Go to the IRS site and look for a link to free software and us that to estimate your tax. If you are using last years software your tax will probably be too high.
The money you take from the IRA is taxed just as if it was wages so you can put it on the wage line if you can not figure out the correct retirement line which can be confusing due to ROTH's.

[manaboutown]

Go to the IRS site and look for a link to free software and us that to estimate your tax. If you are using last years software your tax will probably be too high.
The money you take from the IRA is taxed just as if it was wages so you can put it on the wage line if you can not figure out the correct retirement line which can be confusing due to ROTH's.

It is not taxed as wages (earned income) as there are no deductions for social security. It is simply taxed as income.

[tophcfa]

I would recommend you buy Turbotax Basic ($29.99 from Amazon or Staples). Then, you can plug in any combination of income options you want and also file your taxes at the same time.

Exactly what I would recommend.

[Dan9871]

+1 on talking to Bob Bloom. He's very helpful and knows all this tax stuff inside and out.

[rjm1cc]

It is not taxed as wages (earned income) as there are no deductions for social security. It is simply taxed as income.

You are correct that their are not payroll taxes. But on the wage line for the 1040 you put the gross wages and the software will correctly compute the income tax. If you owe SS you would use form SE. My suggestion was just a quick easy way to get the answer he was looking for and not how to file an actual tax return.

[blueash]

I wonder if you are being confused because of the word "taxable". It does not mean there definitely will be taxes due, it means those dollars are not automatically tax free. So taxable means the dollars will be used to calculate your tax due, which could still be zero.

[manaboutown]

"Report the total amount of the traditional IRA distribution as the taxable amount of your IRA distribution unless you made nondeductible contributions. On Form 1040, it goes on line 15b. If you're using Form 1040A, report it on line 11b. If you've made nondeductible contributions, calculate the taxable portion of the distribution with Form 8606. Then, report the total distribution as an IRA distribution on line 15a of Form 1040 or line 11a of Form 1040A, and report the taxable portion on line 15b of Form 1040 or line 11b of Form 1040A."

from

https://finance.zacks.com/report-ira-withdrawals-tax-return-3811.html

[tcxr750]

If you have a conventional IRA you will have mandatory withdrawals at age 70 1/2. That means you may have to take out greater sums than you want to meet the requirements. There is information on the internet on this.
PS. The withdrawals increase over time until your IRA is depleted or your life force is depleted whichever comes first.
ROTH IRA anyone?