Tax filings do not change dramatically when you retire. The first thing to consider is you may have many planning opportunities to look at during your low income time as you wait to collect social security. Many people in the retirement years people miss out on opportunities to take gains or do Roth conversions and pay a low rate of tax.
Planning opportunities to look at during these years include: **Warning state taxes apply to these items so contact your turbo tax expert to see how it could change if you include the state.
1) Roth IRA conversions. Here is a link that describes this potential opportunity Roth Conversion Take note this increases your taxable income and you should put proposed number into Intuits Taxcaster tool to see how much tax you may owe. You can change the amounts to come to the optimal spot that you feel comfortable. Here is the link to taxcaster for reviewing this opportunity Taxcaster .
2) Recognizing Long term capital gains on sales of investments. Provided that you are in the 12% tax bracket or lower the tax rate on long term capital gains is 0% yes 0%. To determine how much you can make to be below 12% you can go to intuits tax bracket calculator using this link Tax bracket calculator
3) Cashing in government bonds series I or EE bonds. Interest is often only reported upon redemption of these bonds.
As you see there may be many opportunities to pay between 0-12% federal tax on planning opportunities.
Good luck on your planning!
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