What would you like to do?
Why is railroad retirement not taxed?
Railroad retirement benegits are subject to Federal Income tax. Tier 1 of Railroad retirement has the same treatment regarding income taxes as does Social Security benefits. Tier 2 of Railroad Retirement benefits are subject to Federal income tax just like other company pensions. Railroad Retirement Unemployment benefits receive the same tax requirements as do State unemployment benefits.
2 people found this useful
Was this answer useful?
Thanks for the feedback!
Railroad Retirement benefits are exempt from Indiana state income tax. They may be federally taxable, depending on your filing status and income. They follow the same rules …as Social Security benefits.
Income from most private pensions or annuity plans is taxable in Massachusetts. However, the following is a list of some specific pensions that are exempt: Go to the Massachu…setts Department of Revenue web site. Mass gov website and use the search box for TAX TIPS FOR SENIORS AND RETIREES and choose For Seniors and Retirees ... as easy as possible, the Department of Revenue (DOR) has created this "Tax Tips" fact sheet
You can contact the Railroad Retirement Board (RRB) at 1-877-772-5772 or visit their website - RRB.GOV, or visit one of the RRB office across the company.
Some states provide special tax benefits to military retirees. Others simply follow the federal tax rules. The states that do not tax retired military pay are: Alabama, Alaska…, Florida, Hawaii, Illinois, Kansas, Kentucky*, Louisiana, Massachusetts, Michigan, Mississippi*, Missouri*, Nevada, New Hampshire, New Jersey, New York, North Carolina*, Ohio, Oregon*, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming. (*With conditions) Source: http://www.retirementliving.com/RLtaxes.html A chart with all the state-by-state details is available here: http://www.docstoc.com/docs/3483678/STATE-INCOME-TAXES-ON-PENSIONS
The answer depends on your individual circumstances. If you are retired and Social Security benefits are your only source of income, you may file, but generally will not be …taxed. If you also receive income from sources other than Social Security, your benefits will be taxed if your total taxable income exceeds a certain threshold. The formula is very simple. Your adjusted gross income (AGI), meaning income from all taxable sources, will fall into one of the following categories. Depending on your personal situation, you could be taxed on 0% of your Social Security benefits, on 50% of your benefits, or on 85% of your benefits. For a single taxpayer the base amount (cap) is $25,000.If your total AGI is $25-34,000, you will pay tax on 50% of your Social Security benefitsIf your total AGI is above $34,000, you will pay tax on 85% of your benefits For married couples filing jointly, the base amount is $32,000If your total AGI is $32-$44,000, you will pay tax on 50% of your Social Security benefitsIf your total AGI is above $44,000, you will pay tax on 85% of your benefits
The standard withholding on all withdrawals for 401k plans is 20%. There are two exlcusions to this and that is Required Minimum Distributions and Hardship Withdrawals. In add…ition, some plans also allow you to choose your withholding amounts on installment payments. Therefore, you can elect to have less than 20% withheld on installments.
The answer to your questions depends largely on other factors. I'd need to know your marital status and income information, how much you receive from Social Security and… how much from your pension. I can give you some general guidelines as set out by the IRS. _ In cases where Social Security is your only source of income, your income is not taxable, therefore there is no filing requirement. _ If you derive income from other sources in addition to Social Security it may become taxable if your modified adjusted gross income exceeds the "base" amount for your filing status. _ To determine your "base" amount there is a worksheet in the Form 1040 instruction booklet on page 25. (Link: http://www.irs.gov/pub/irs-pdf/i1040gi.pdf ). _ 2007 base amounts are: · $32,000 for married couples filing jointly. · $25,000 for single, head of household, qualifying widow/widower with a dependant, or married individuals filing separately who did not live with their spouses at any time during the year. · $0 for married persons filing separately who lived together during the year. Note: HOW TO FIGURE OUT YOUR BASE AMOUNT 1. Add one-half of the total Social Security you received to all other income, including any tax exempt interest and other exclusions from income. 2. Then, compare this total to the base amount of your filing status. If the total is more than your base amount, then some of your benefits may be taxable. Source: http://www.irs.gov/newsroom/article/0,,id=179091,00.html Hope this helps. Roger Hadad, Effectur Inc., www.irs101.blogspot.com
Do California residents pay state income taxes on their Railroad Retirement pension under the Railroad Retirement Act?
Tier 1 Railroad Retirement benefits are treated the same as Social Security benefits for California income tax purposes. If any portion of your benefits were included in you…r federal income, you can claim an adjustment on line 20 of Schedule CA (for Form 540 filers) or on line 14c of Form 540A.
Yes, except for the portions of the checks that represent a return of after-tax employee contributions, qualified Roth IRA and Roth 401k distributions, and return of after-tax… (non-deductible) traditional IRA contributions. Note that withholding on periodic payments from pension plans is optional. But the fact that no tax is withheld does not mean that the payments are tax-free. You will have to calculate the taxes and pay them when you file your tax return at the end of the year. Note also that if you have a substantial underpayment of taxes, you may be subject to an underpayment penalty. If you are referring to Social Security benefits, a portion of those can be taxable depending on your total income and your marital and filing status.
Yes and it is very possible that some of the retirement income could be taxable income on your income tax return.
Answer First off, there are very few, if any, disadvantages. Advantages include the basic concept that paying taxes later, in this case frequently much late…r, is much bettr than paying them now. Add to it, the taxes you don't pay you get to invest and earn a return on. Those earnings are generally tax deferred too. Special status of most qualified deferred plans means they are exempt from attachment or seizure, even during a bankruptcy. (Security of savings). There are generally methods to obtain hardship or special purpose early withdrawals. If the funds pass to your heirs, upon death, before or after you start withdrawing them, they generally pass without being taxed too.
Yes, unfortunately this is the case. It's a pro-rated amount after your AGI exceeds a certain threshold. The generally increased per year so you can check the IRS web page or …check the social security web page for the AGI limitation. Charles Coker,CPA Charles, I think you answered a different question; What I think the original question was, is: "Do you pay FICA taxes on earned income after retiring (retirement meaning: collecting a SS benefit)?". I think the answer is simply: yes. Are there other ways that work can increase your benefits? Yes. Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due.
Yes, you have to pay taxes on your retirement at a rate determined by your retirement income, which should be much lower than your working income. Yes, you have to pay taxes o…n your retirement at a rate determined by your retirement income, which should be much lower than your working income.
Retirees are not exempt from paying Alabama state tax. However, Alabama does not tax Social Security, Federal retirement benefits, Alabama state retirement benefits, and per…iodic distributions from private defined benefit pension plans. A "defined benefit" pension plan is a traditional pension plan where the employer guarantees a certain benefit when you retire. The does not include a 401k type of plan which is a "defined contribution" plan where you take your chances with your own investments. Distributions from IRA, 401k, etc plans are taxable in much the same manner as they are on your federal return. If you made deductible contributions to an IRA plan before 1982, you may be eligible for an additional adjustment. All other types of income are taxable the same for retirees as for anyone else.
Answer If either your employer bought the disability policy, or you purchased it with PRE-tax money (thru payroll deduction perhaps), then I believe disability benefits… are taxable at ordinary income tax rates. If it was purchased with after tax money, usually not taxable. A good rule of thumb is: If YOU haven't paid taxes on the premiums, you're going to pay taxes on the benefits. If you mean "pension payments" when you say "retirement checks," then yes. It is taxed like ordinary income.