I pay very little taxes in retirement, do you? (2014, states, relative)
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Well, you always get the 7% savings of no FICA and Med. And after 65, a bigger exemption. But for anyone with appreciable pensions, as Matt always says, the paycheck never stops. I'd still rather have $150k in taxable income, than $50k tax free, any day....
There is no more bigger exemption after 65. They stopped that a few years ago and cut the threshold for medical deductions from 10% to 7-1/2% for age 65 or older
Well, you always get the 7% savings of no FICA and Med. And after 65, a bigger exemption. But for anyone with appreciable pensions, as Matt always says, the paycheck never stops. I'd still rather have $150k in taxable income, than $50k tax free, any day....
I have a much higher income now than when I worked....and I'm paying much higher taxes. But, I'd rather have it this way (higher income/more taxes paid) than the other way around.
There is no more bigger exemption after 65. They stopped that a few years ago and cut the threshold for medical deductions from 10% to 7-1/2% for age 65 or older
Really? I guess since we aren't 65 yet, I never noticed. I really though the standard deduction was larger for 65 and up! Well, at least Virgina exempts the first $12k of income for each of us from state taxes.
There is no more bigger exemption after 65. They stopped that a few years ago and cut the threshold for medical deductions from 10% to 7-1/2% for age 65 or older
There is a higher standard deduction if you don't itemize and you are over 65. This is from the IRS regs:
Higher standard deduction for age (65 or older). If you don't itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered age 65 on the day before your 65th birthday. Therefore, you can take a higher standard deduction for 2016 if you were born before January 2, 1952.
There is a higher standard deduction if you don't itemize and you are over 65. This is from the IRS regs:
Higher standard deduction for age (65 or older). If you don't itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered age 65 on the day before your 65th birthday. Therefore, you can take a higher standard deduction for 2016 if you were born before January 2, 1952.
In answer to the OP, we are paying more taxes than I expected.
I keep my AGI under the 25% rate, which is just under 40k. I purposely stay in the 15% tax bracket with my part-time W2 job.
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