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Retirement tax questions
Both are taxed as ordinary income.
The US income tax system is a progressive tax system, meaning that your marginal tax rate increases as your taxable income increases. That combined with your standard deduction or itemized means that additional amounts of taxable income that you enter will see a higher marginal tax rate than the first amounts of taxable income that you enter. People with higher amounts of ordinary taxable income pay taxes at a higher average tax rate on that income.
You can increase tax withholding on the W-2 income, the 1099-R income or both to avoid underpayment of taxes. It all gets lumped together on your tax return.
‎January 24, 2024
7:13 AM
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