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New Member
posted Jun 1, 2019 10:14:43 AM

How do I estimate the tax I'll owe following retirement?

How do I estimate the tax I'll owe when I'm living on retirement savings?  

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1 Replies
Employee Tax Expert
Jun 1, 2019 10:14:44 AM

It will all depend on your total income. Let me give you an example. I will assume you are filing Single.

Let's say you receive $18,000 in Social Security Income. And I will be conservative and estimate that the entire 85% is taxable. Let's assume that you receive another $40,000 from your retirement distributions. So your total income is $58,000.

Less standard deduction of $12,200 (in 2019), plus $1,650 if you are over 65. This is if you do not itemize, if you do, plug in the amount that you think you will have for itemized deductions.

Your taxable income is then $44,150. Using the tax brackets (2019), your tax is: $5,571. So looks like if you ask Social Security Administration and the Trustee of your retirement account to withhold 10% on the gross pay, that should cover taxes due. Of course, depending on the state you live in, you may have to pay state taxes as well.