Claiming NJ Pension

[luvmycop]

I collected for my police pension 46k paid 2k in federal taxes, why when i enter on my taxes is it showing that i owe money ... how do i know how much of it is taxable it 2nd year being retired and have 2 dependents in school 

[DianeW777]

The total income on the tax return will be a factor on the amount you owe.  The pension taxable portion for the federal return will depend on whether you contributed any money to the police pension that was 'after tax'.  If not, then it will be fully taxable on the federal return. The total taxable income on the return determines your tax rate.  

Example:  If your taxable income on the return (line 15, Form 1040) is $30,000 your tax rate would be 10% (approximate).  This would mean $3000 tax liability. The withholding rate on your pension is approximately 4.3%. You may want to consider completing a new W-4P for your pension withholding.

For New Jersey, they have a Retirement/Pension Exclusion.  You can review more about this by visiting NJ Form 1040-2020 Instructions, page 19.

TurboTax will walk you through it.

[luvmycop]

still is not making sense to me tax return is 8700.00 then i add in his taxable pension that is 46k we paid 2k in federal outta monthly checks, then they take the whole 8700.00 plus the 2 k we already paid plus we would owe 680.00? how is that possiable that means we are paying over 10k in taxes on a 46k pension and 15k of it was a pension loan, so we only received 31k of that 

[ThomasM125]

If your taxable income is $31,000 (46,000 less 15,000 loan portion), then your tax would be less than $1,000, filing married-joint. You may have entered the pension income wrong, on the form 1099-R entry. You can see your form 1040 in TurboTax to see what the taxable portion of your pension income is on line 5 (b) of your tax return by using the following tabs in TurboTax online:

1. Tax Tools (left side of the menu bar)
2. Tools
3. View Tax Summary
4. Preview my 1040 (left menu bar)

If the taxable amount of your pension is wrong, you have to correct your form 1099-R entry.

[fanfare]

If your NJ taxable income (Line 27) is $100,000 or more,

you lose the pension exclusion. It is all taxable.

You are back in the high tax State of New Jersey.

[fanfare]

why is your tax refund 8700 before entry of the pension?

how does that happen?

[luvmycop]

hmm he has a part time job that he made 14-15k we paid 1400.00 in fed taxes i collected 17k in unemployment and paid the taxes on that, we have two children interest on home and taxes on our home and medical deductions.

when i add his 46k pension  it takes us to owing 640.00 it just don't make sense he is newly retired so we don't have state tax on it just federal tax on it for first 3 years. We also pay for a pension loan of 1280.00 a month outta the pension check so truly 15k of that pension money is paid back to the pension we dont even see that in monthly check

[luvmycop]

its NOT over 100k its about 77k 

[luvmycop]

on the 1099 r from pension it say gross 46,177.80 then taxable amount as 46075.56

[VolvoGirl]

The only thing I can say is the more income you enter the more tax you pay.  And each job, Unemployment, pension etc is only holding out enough withholding for that one thing.

[fanfare]

There is currently a bug in TurboTax that doubles your taxable unemployment benefits.

ie from 17000 to 34000.

Check for that on form 1040 line 8

[fanfare]

I just ran all the numbers you cited.

Without the child tax credits, the tax comes to 883 dollars.

If your children are over age 17 then the tax return you see is correct.

[luvmycop]

thank you and where can i check that double of unemployment?

[fanfare]

Boy I blew it. You can ignore last post about trying your numbers and getting the same tax.

 Without seeing your actual tax return it is not possible to know what's happening.

[fanfare]

UI income is on form 1040 Line 8