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I feel your pain but taxes require planning. I have a similar situation with my taxable brokerage that throws off dividends and those don't have any withholding so each year I have to write a check worth thousands of dollars to the IRS for taxes on those. And that is above and beyond the crazy taxes I pay on my regular income (single, no kids). Thankfully I just retired so going forward with zero income no more taxes
I don’t bother withholding from SS myself (SS Disability). Instead, we figure how much our total tax liability will be and either withhold more from my wife’s job, or pay estimated payment each quarter.
Another easy way to pay taxes owed on SS is to make a withdrawal from your retirement account and withhold a lot of tax. If you are over 59 1/2 there is no early withdrawal penalty. For example, if I project that I will owe $1,000 in tax I can withdraw $1,000 from my IRA and Fidelity lets me withhold up to $999 to pay federal and/or state tax. The $1,000 is added to your income for the year so you would have to consider how much that withdrawal will increase your taxes. It's an easy alternative to paying estimated tax but you should do it throughout the year just like estimated tax.
This is good information. I am not yet collecting SS (FRA comes next year) but my main income is a pension plus I have a part-time job that brings in an extra $25K a year. I am going to have to keep all this in mind, too.
Social Security starts becoming taxable over $25,000. Between $25k and $34k (which is your SS) 50% of the benefits are taxable so $9k is taxable but that is below the standard deduction so you wouldn't owe any tax.
As far as all your income being from SS, you don't have any investment income from interest, dividends, or capital gains? It would be strange to be 66 and have no investments or savings especially for someone making $90k a year. Also if you have a retirement account like a traditional IRA, any withdrawals are taxable.
Thank You for pointing that out.
No,I don't have savings/investments of any kind...I came to terms with my life's mistakes some time ago..plus it wasn't until rather recently that I started making this good money...no time to catch up.
Earning that kind of money ($90K per year) and at your age (66?) all you will have to live on is SS($34K per year) if your retire plus you have debt, says you screwed the pooch along the way.
YEP...I accepted my f ups a long time ago....I usually come on these forums to vent and lament.
I'm the poster child for financial suicide...And then when I was doing better by consolidating debt,etc...I got sicker.
FWIW...Just saw what the Cancer Clinic billed for my first Chemo Session...$73,798....
This is before they submit to Medicare/Insurace...Wonder how much I will be responsible for...
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