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Level 1
February 14, 2022
Question

What are the taxes on $35,000 IRS distribution for someone over 65?

  • February 14, 2022
  • 3 replies
  • 1 view
What are the taxes on $35,000 IRA distribution for some one over 65?

3 replies

Alumni - Intuit
February 14, 2022

The amount of tax you owe depends on many factors like your filing status, deductions or credits you might be eligible for, etc. 

You can use TaxCaster to get an estimate

You can also check the link below for 2021 tax brackets and standard deductions.

IRS provides tax inflation adjustments for tax year 2021.

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Level 15
February 14, 2022

Best way to know is to use the tax estimator.  It will be correct for 2021, and if you are planning for 2022, it will be pretty close unless Congress passes more tax law changes.

TaxCaster tax calculator

 

Let me give you one basic scenario.  If you are single, your social security is tax-free as long as 1/2 your social security, plus all your other income, is less than $25,000.  If your other income is more than that, up to 85% of your social security will be taxable as well.

 

Assume you are single and you get $1500 per month in social security ($18,000 per year).  

https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable

 

Half your SS plus the IRA is more than $25,000, so your SS is partly taxable.  Your gross taxable income will be $15,000 (85% of SS) plus $35,000 IRA = $50,000.  Standard deduction for single over 65 is $13,900, so your final taxable income is $36,100.  The tax on that will be about $4100. 

 

But you really need to check for your own specific facts and circumstances. 

SteamTrain
Level 15
February 14, 2022

No one can actually tell you that.

 

The income from an IRA distribution (when over age 59.5) , just gets added to all your other income, and taxes are calculated on your total income (After Std or Itemized deductions).  The additional income can also make more of your SS income subject to taxation too......but TTX will calculate that after all yoru entries are made.

 

IF your other income, before the IRA is included, have you in (say) the 12% tax bracket, the extra income may push some of it into the 22% bracket....or if already in the 22% bracket, it may take you into the 24% range...etc..etc.

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The desktop software has an easy way to model the next year's income and taxes, based on what you filed this year  (the "What-IF" worksheet)...but don't ever change anything in your "Online" TTX account...to do that would destroy your current tax return.

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*