I started Roth conversion 10 years ago - now no IRA and all in the Roth. Waited on SS to age 70 (very hard to convert and take SS). 2022 retirement income 6 figures with our SS almost $70K (pension, annuity, dividends that are tax free). My Turbotax guesstimate is $2.2K FED and $1.1K STATE (our state does not tax SS). The SS taxable amount is about 30%, about $25K on the income tax line. He mentions pick/choose how much to take out of retirement accounts - true if the person is under age 72 but age 72 and up the IRS tells you how much you have to take out of those accounts - you can take more if you want or need to, BUT you can't take less than the RMD value.
I think you misspoke about the Medicare tax being based (as you stated) on you taxable income. My understanding is that it is based on the MAGI which includes ALL income BEFORE any deductions including the personal exemption amount. I wish it was based on taxable income!
How about RMD's. I don't have discretion to not take them. How about tax free qualified dividends and long term capital gains. We have 8 sources of income and about 1/2 consists of qualified dividends.
Great stocks and I just bought in on them, but I'm interested in making short term profit, let say turn a $150K to $500k in 6months, I'd appreciate tips on how what stocks to buy to make this much profit.
Hans great video! As a single person I understand the 22% bracket income limit is 87,075 and moving to 24% goes much higher for little additional federal tax. But wouldn’t the IRMAA kick in when your income goes over the 22% bracket?
So for the purpose of IRMAA, if i sale my house this year let's say July 2022 when i will also turn 63, let's say it sales for $290,000, i will be good on the cap gains for marry filing joint but wont that 290K from the house be counted against me when I turn 65 if they go back 2 years after i turn 65 on my taxes to determine my Medicare payment.
No. As long as you are 65 as of December 31, you get the additional exemption amount. When the other spouse turns 65, they get the exemption for that year. From then on, you each have the exemption, totaling 2800 for each year. The exemption is currently adjusted upward each year, but that may not always be the case depending on future tax laws.
IRMAA is on your MAGI (that's before deductions and even larger than your AGI). It adds back things like interest from tax-exempt bonds. It's basically your entire gross income with few things removed, such as charitable expenditures.
Note: IRMAA is based on your Modified Adjusted Gross Income, or MAGI, which can easily be larger than your AGI. (A little more info below.) Note that once you go over a level, your Medicare premium doubles. Go over to a higher level, and the premium triples. It is a series of steep cliffs.
I have not retired yet but was told by an HR person that withdrawals from an ira are taxable but don’t apply to the Medicare tax earnings. So they were wrong or maybe they don’t know many accounts and never had one go over that amount.
@@ericthornton5252 They are wrong except in one case: withdrawals from a Roth IRA will not be taxed and thus will not be in your MAGI (or AGI) and thus not apply to IRMAA. (Of course, those withdrawals must meet the standard of Roth IRA non-taxable withdrawals, such as the 5-year rule on appreciation, but that's another sub-area of issues. The general principle is that if the withdrawal from the Roth IRA is legitimately tax-free, they will not be in the IRMAA base.)
Taxes are one of my favorite topics to learn about now that I've retired. Never gave taxes much thought while working.
Good overview! Thanks.
I learn something every time I listen to you
New Hampshire also does not have an income tax. There used to be a dividend tax, but that was repealed effective 2022.
Thanks for helping me with Plan-D and Plan-G today... Your Representatives are Wonderful to work with.
Thank you for allowing me to help you today Mr. LaBorde. You were a pleasure to work with also. Katrina
You do a terrific service explaining to us. Thankyou really enjoy.
Thank you for this, and the many other tips that you give. Very appreciated!
I started Roth conversion 10 years ago - now no IRA and all in the Roth. Waited on SS to age 70 (very hard to convert and take SS). 2022 retirement income 6 figures with our SS almost $70K (pension, annuity, dividends that are tax free). My Turbotax guesstimate is $2.2K FED and $1.1K STATE (our state does not tax SS). The SS taxable amount is about 30%, about $25K on the income tax line.
He mentions pick/choose how much to take out of retirement accounts - true if the person is under age 72 but age 72 and up the IRS tells you how much you have to take out of those accounts - you can take more if you want or need to, BUT you can't take less than the RMD value.
Increasing to 75 soon. And this is why Roth conversions should be part of your plan.
I think you misspoke about the Medicare tax being based (as you stated) on you taxable income. My understanding is that it is based on the MAGI which includes ALL income BEFORE any deductions including the personal exemption amount.
I wish it was based on taxable income!
Hans - Starting in 2022, Colorado no longer taxes Social Security.
How about RMD's. I don't have discretion to not take them. How about tax free qualified dividends and long term capital gains. We have 8 sources of income and about 1/2 consists of qualified dividends.
Great stocks and I just bought in on them, but I'm interested in making short term profit, let say turn a $150K to $500k in 6months, I'd appreciate tips on how what stocks to buy to make this much profit.
@Fred Howard That sounds great and how do i connect with her ?
@Fred Howard Okay i just found her website and left a message for her. thanks.
Then you also have capital gains tax if you have some investments in brokerage accounts.
My friend your personal deduction amounts are for 2021. 2022 have been released. Single 2022 $12,900
You did not include New Hampshire in the tax free states
Can I have a link to the video on how social security is taxed please
Hans great video! As a single person I understand the 22% bracket income limit is 87,075 and moving to 24% goes much higher for little additional federal tax. But wouldn’t the IRMAA kick in when your income goes over the 22% bracket?
Yes it would kick in. One balances against the other.
When you say that the most you can withdraw from your IRA and remain in the 22% tax bracket is $89,075, does that include your SSA earnings as well?
85% of your Social Security earnings are taxable so they count in the calculation
So for the purpose of IRMAA, if i sale my house this year let's say July 2022 when i will also turn 63, let's say it sales for $290,000, i will be good on the cap gains for marry filing joint but wont that 290K from the house be counted against me when I turn 65 if they go back 2 years after i turn 65 on my taxes to determine my Medicare payment.
Yes but it is my understanding you can then file an appeal because it was a one time thing. Then the following year you go back to normal.
The increased standard deduction for couples, do both spouses need to be over 65? I know a lot of other tax situations only one needs to be.
No. As long as you are 65 as of December 31, you get the additional exemption amount. When the other spouse turns 65, they get the exemption for that year. From then on, you each have the exemption, totaling 2800 for each year. The exemption is currently adjusted upward each year, but that may not always be the case depending on future tax laws.
Is IRMA on your AGI or after deductions? Is your IRMA readjusted once you go back below the $ 91,000?
IRMAA is on your MAGI (that's before deductions and even larger than your AGI). It adds back things like interest from tax-exempt bonds. It's basically your entire gross income with few things removed, such as charitable expenditures.
Note: IRMAA is based on your Modified Adjusted Gross Income, or MAGI, which can easily be larger than your AGI. (A little more info below.) Note that once you go over a level, your Medicare premium doubles. Go over to a higher level, and the premium triples. It is a series of steep cliffs.
I have not retired yet but was told by an HR person that withdrawals from an ira are taxable but don’t apply to the Medicare tax earnings.
So they were wrong or maybe they don’t know many accounts and never had one go over that amount.
@@ericthornton5252 They are wrong except in one case: withdrawals from a Roth IRA will not be taxed and thus will not be in your MAGI (or AGI) and thus not apply to IRMAA. (Of course, those withdrawals must meet the standard of Roth IRA non-taxable withdrawals, such as the 5-year rule on appreciation, but that's another sub-area of issues. The general principle is that if the withdrawal from the Roth IRA is legitimately tax-free, they will not be in the IRMAA base.)
Income taxes are not different in retirement. This video should be removed by RUclips.