Question: I am 67 and retired. My wife will retire soon. We have
several healthy IRAs to supplement Social Security income. One concern
is guessing how much we can withdraw from our IRAs each year without
jumping too many tax brackets.
Is there a simple way to estimate how much we can withdraw each
year without jumping tax brackets? I asked the IRS, but they got stumped
at the word "simple." Is there estimating software that we could use for
our purpose without having to buy official tax software each year?
J.T., by e-mail from Houston
Answer: Calculating the amount of Social Security benefits to be
taxed is one of the most vexing tax problems we face. It's difficult to
come up with rules of thumb. Also, because adding $1 of regular
retirement income can cause you to add as much as 85 cents of Social
Security benefits to your taxable income, it's very easy to "overrun" a
tax bracket and see a major increase in your tax bill.
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