## Simple Calculator For Estimating Income Taxes in Retirement

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Topic Author
catchinup
Posts: 786
Joined: Sun Dec 31, 2017 5:35 pm

### Simple Calculator For Estimating Income Taxes in Retirement

Is there a simple calculator online that will estimate my state & federal income tax assuming the following annual income in retirement:

Taxable Account Dividends = 25k
Inherited TIRA RMD = 30k

Total = 100k

The taxable account dividends come from VTSAX and VFWAX so mostly taxable on both state and federal returns. I realize there is some foreign tax credit possible for VFWAX but it can be ignored for my purposes. I just want to get a rough estimate of my tax liability based on the pre-tax income outlined above. I live in California, filing single. I would take the standard deduction.
MathWizard
Posts: 6831
Joined: Tue Jul 26, 2011 1:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

catchinup wrote: Wed Jul 31, 2024 10:20 pm Is there a simple calculator online that will estimate my state & federal income tax assuming the following annual income in retirement:

Taxable Account Dividends = 25k
Inherited TIRA RMD = 30k

Total = 100k

The taxable account dividends come from VTSAX and VFWAX so mostly taxable on both state and federal returns. I realize there is some foreign tax credit possible for VFWAX but it can be ignored for my purposes. I just want to get a rough estimate of my tax liability based on the pre-tax income outlined above. I live in California, filing single. I would take the standard deduction.
https://smartasset.com/taxes/california-tax-calculator

For just federal,
https://turbotax.intuit.com/tax-tools/c ... taxcaster/
FiveK
Posts: 16471
Joined: Sun Mar 16, 2014 2:43 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Looking at the two tools covered in the Tax Estimation Tools wiki article that include a State tax estimate, and assuming all \$25K are qualified dividends, both give the same federal estimate: \$12,091.

The state estimates are slightly different: IRSCalc = \$5441 and toolbox = \$5310. I think the toolbox handles the \$144 exemption as a credit correctly, not as a subtraction from gross to get taxable income as IRSCalc does.

If you can use Excel and have some flexibility in the "additional tIRA withdrawal", you can download the toolbox and have it generate a graph like this:

That's your situation (assuming age <65 and all \$25K qualified) after you have already made \$6500 "additional tIRA withdrawal". The marginal rate on that \$6500 is somewhere between 18%-20%.

Does that look correct to you?
Investnewbie01
Posts: 111
Joined: Tue Jun 06, 2017 12:33 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

So Rob Bergeron video on how to decide order to withdraw from your funds for maximum tax benefits, recommends a free site called ORP, but sadly it is no longer available.
I am looking for a free site that suggests percentages of withdrawals from TIRA,s and taxable accounts. The suggestion here appears just for California.
Any suggestions welcome, thanks
FiveK
Posts: 16471
Joined: Sun Mar 16, 2014 2:43 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Investnewbie01 wrote: Thu Aug 01, 2024 8:13 pm So Rob Bergeron video on how to decide order to withdraw from your funds for maximum tax benefits, recommends a free site called ORP, but sadly it is no longer available.
I am looking for a free site that suggests percentages of withdrawals from TIRA,s and taxable accounts. The suggestion here appears just for California.
Any suggestions welcome, thanks
Not sure what is meant by "The suggestion here appears just for California"?

A good place to start is aiming for a marginal tax rate now that equals the marginal tax rate you estimate you'll have when taking SS and RMDs. Do you have that estimate?
americandehati_123
Posts: 5
Joined: Fri Nov 10, 2023 7:50 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Hi Please check this numbers. I ran this through my tool I created for my self.
I assumed all dividends are ordinary. If you know exact number for qualified dividends I can try and run this again.

ID: 219

Tax Year: 2024

Filing Status: Single

Description: BH user

W2: \$0.00

1099 Income: \$0.00

Roth Conversion: \$0.00

Intrest and Dividends: \$25,000.00

Qualified Dividends: \$0.00

Other Income: \$75,000.00

Short Term Gain: \$0.00

Short Term Loss: \$0.00

ST Carrry Over Loss: \$0.00

Long Term Gain: \$0.00

Long Term Loss: \$0.00

LT Carrry Over Loss: \$0.00

Standard Deduction: \$14,600.00

MAGI: \$100,000.00

Total Taxable Income: \$85,400.00

Taxable Income Ordinary: \$85,400.00

Federal Ordinary Tax: \$13,841.00

Marginal Tax Bracket: 22%

Capital Loss: \$0.00

Captial Gains: \$0.00

Capital Gains Subjected to Tax: \$0.00

Capital Gains Tax: \$0.00

Total Federal Tax: \$13,841.00

Thanks
FiveK
Posts: 16471
Joined: Sun Mar 16, 2014 2:43 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

americandehati_123 wrote: Thu Aug 01, 2024 8:24 pm Total Federal Tax: \$13,841.00
That matches the "smoothed" (to get "clean" marginal rate curves) calculation of the toolbox. The "exact" (e.g., using the tax table for taxable income < \$100K) answer is \$13,847.

Either one is close enough.
Investnewbie01
Posts: 111
Joined: Tue Jun 06, 2017 12:33 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Many thanks for the replies. What I meant is the first suggestion is for California, the second is for current tax year.
What I require is a tool that projects tax as I withdraw monies
Thanks
FiveK
Posts: 16471
Joined: Sun Mar 16, 2014 2:43 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Investnewbie01 wrote: Thu Aug 01, 2024 9:10 pm Many thanks for the replies. What I meant is the first suggestion is for California, the second is for current tax year.
Oh, you meant in this post?
What I require is a tool that projects tax as I withdraw monies
Seems the personal finance toolbox Excel spreadsheet referenced in this post will do what you want...?
MathWizard
Posts: 6831
Joined: Tue Jul 26, 2011 1:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Investnewbie01 wrote: Thu Aug 01, 2024 8:13 pm So Rob Bergeron video on how to decide order to withdraw from your funds for maximum tax benefits, recommends a free site called ORP, but sadly it is no longer available.
I am looking for a free site that suggests percentages of withdrawals from TIRA,s and taxable accounts. The suggestion here appears just for California.
Any suggestions welcome, thanks
The person posting wanted one for his state of California.

Smart asset has calculators for each state. Try typing

smart asset taxes Oregon

into Google if you live in Oregon, substitute for whatever
state you desire.

I just calculate my own taxes using the current tax code for
federal and state within my planning spreadsheet.
Topic Author
catchinup
Posts: 786
Joined: Sun Dec 31, 2017 5:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

FiveK wrote: Thu Aug 01, 2024 7:05 pm Looking at the two tools covered in the Tax Estimation Tools wiki article that include a State tax estimate, and assuming all \$25K are qualified dividends, both give the same federal estimate: \$12,091.

The state estimates are slightly different: IRSCalc = \$5441 and toolbox = \$5310. I think the toolbox handles the \$144 exemption as a credit correctly, not as a subtraction from gross to get taxable income as IRSCalc does.

If you can use Excel and have some flexibility in the "additional tIRA withdrawal", you can download the toolbox and have it generate a graph like this:

That's your situation (assuming age <65 and all \$25K qualified) after you have already made \$6500 "additional tIRA withdrawal". The marginal rate on that \$6500 is somewhere between 18%-20%.

Does that look correct to you?
I'm sorry , the additional IRA withdrawal would be coming out of my inherited pre-tax IRA. I didn't realize calling it a tIRA would make any difference. I am not sure what the 6.5k you reference is about but I assume it has something specific to do with a tIRA?
Topic Author
catchinup
Posts: 786
Joined: Sun Dec 31, 2017 5:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

catchinup wrote: Wed Jul 31, 2024 10:20 pm Is there a simple calculator online that will estimate my state & federal income tax assuming the following annual income in retirement:

Taxable Account Dividends = 25k
Inherited TIRA RMD = 30k
Additional inherited TIRA withdrawal = 45k

Total = 100k

The taxable account dividends come from VTSAX and VFWAX so mostly taxable on both state and federal returns. I realize there is some foreign tax credit possible for VFWAX but it can be ignored for my purposes. I just want to get a rough estimate of my tax liability based on the pre-tax income outlined above. I live in California, filing single. I would take the standard deduction.
Topic Author
catchinup
Posts: 786
Joined: Sun Dec 31, 2017 5:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Thanks everyone for the responses. I am reviewing them. I updated my original post to clarify that the additional 45k withdrawal would be coming from my inherited tIRA, not my own tIRA. I don't have my own tIRA.
FiveK
Posts: 16471
Joined: Sun Mar 16, 2014 2:43 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

catchinup wrote: Fri Aug 02, 2024 1:01 am
FiveK wrote: Thu Aug 01, 2024 7:05 pm Looking at the two tools covered in the Tax Estimation Tools wiki article that include a State tax estimate, and assuming all \$25K are qualified dividends, both give the same federal estimate: \$12,091.

The state estimates are slightly different: IRSCalc = \$5441 and toolbox = \$5310. I think the toolbox handles the \$144 exemption as a credit correctly, not as a subtraction from gross to get taxable income as IRSCalc does.

If you can use Excel and have some flexibility in the "additional tIRA withdrawal", you can download the toolbox and have it generate a graph like this:

That's your situation (assuming age <65 and all \$25K qualified) after you have already made \$6500 "additional tIRA withdrawal". The marginal rate on that \$6500 is somewhere between 18%-20%.

Does that look correct to you?
I'm sorry , the additional IRA withdrawal would be coming out of my inherited pre-tax IRA. I didn't realize calling it a tIRA would make any difference.
It doesn't make any difference: anything coming out of a pre-tax IRA, whether your own or inherited, withdrawn or converted to Roth, is ordinary income and taxed accordingly.
I am not sure what the 6.5k you reference is about but I assume it has something specific to do with a tIRA?
The chart starts at \$6.5K "additional", not at \$0, to show the marginal tax rates on additional withdrawals above \$6.5K.

Does that help?
thedaybeforetoday
Posts: 942
Joined: Fri Sep 02, 2022 5:16 am

### Re: Simple Calculator For Estimating Income Taxes in Retirement

MathWizard wrote: Wed Jul 31, 2024 10:25 pm
catchinup wrote: Wed Jul 31, 2024 10:20 pm Is there a simple calculator online that will estimate my state & federal income tax assuming the following annual income in retirement:

Taxable Account Dividends = 25k
Inherited TIRA RMD = 30k

Total = 100k

The taxable account dividends come from VTSAX and VFWAX so mostly taxable on both state and federal returns. I realize there is some foreign tax credit possible for VFWAX but it can be ignored for my purposes. I just want to get a rough estimate of my tax liability based on the pre-tax income outlined above. I live in California, filing single. I would take the standard deduction.
https://smartasset.com/taxes/california-tax-calculator

FYI for all, the above calculator posted by smart asset is no longer valid in CT if one has a pension or annuity withdraws, and income under 100k mfj.
Laws around pensions/annuity income being taxable for those under 100k have changed in CT, and smart asset has yet to alter their calculator for CT regarding said laws.
I've sent them several notes of feedback about this issue, and when I check occassionally, still hasn't been fixed.
YMMV
"When I was a kid my parents moved a lot, but I always found them." R. Dangerfield
Topic Author
catchinup
Posts: 786
Joined: Sun Dec 31, 2017 5:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

FiveK wrote: Fri Aug 02, 2024 1:14 am
catchinup wrote: Fri Aug 02, 2024 1:01 am
FiveK wrote: Thu Aug 01, 2024 7:05 pm Looking at the two tools covered in the Tax Estimation Tools wiki article that include a State tax estimate, and assuming all \$25K are qualified dividends, both give the same federal estimate: \$12,091.

The state estimates are slightly different: IRSCalc = \$5441 and toolbox = \$5310. I think the toolbox handles the \$144 exemption as a credit correctly, not as a subtraction from gross to get taxable income as IRSCalc does.

If you can use Excel and have some flexibility in the "additional tIRA withdrawal", you can download the toolbox and have it generate a graph like this:

That's your situation (assuming age <65 and all \$25K qualified) after you have already made \$6500 "additional tIRA withdrawal". The marginal rate on that \$6500 is somewhere between 18%-20%.

Does that look correct to you?
I'm sorry , the additional IRA withdrawal would be coming out of my inherited pre-tax IRA. I didn't realize calling it a tIRA would make any difference.
It doesn't make any difference: anything coming out of a pre-tax IRA, whether your own or inherited, withdrawn or converted to Roth, is ordinary income and taxed accordingly.
I am not sure what the 6.5k you reference is about but I assume it has something specific to do with a tIRA?
The chart starts at \$6.5K "additional", not at \$0, to show the marginal tax rates on additional withdrawals above \$6.5K.

Does that help?
I'm sorry but I still don't understand how to use this graph. Is this taking into account the baseline income of 25k of dividends plus \$30k in RMDS and then showing the impact of additional pre-tax withdrawals? Is this estimating federal tax only? What does being less than 65 years old have to do with anything? Thanks
FiveK
Posts: 16471
Joined: Sun Mar 16, 2014 2:43 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

catchinup wrote: Sun Aug 04, 2024 11:46 pm Is this taking into account the baseline income of 25k of dividends plus \$30k in RMDS and then showing the impact of additional pre-tax withdrawals?
Yes. That's a common way of looking at the question: start with "unavoidable" income and then look at the marginal tax rate for incurring additional income. The "additional income" is often Roth conversion amounts, but the principle is the same.
Is this estimating federal tax only?
No, it includes California state tax also.
What does being less than 65 years old have to do with anything?
The standard deduction is higher for age 65+.

Does that help?
Topic Author
catchinup
Posts: 786
Joined: Sun Dec 31, 2017 5:35 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

FiveK wrote: Mon Aug 05, 2024 12:10 am
catchinup wrote: Sun Aug 04, 2024 11:46 pm Is this taking into account the baseline income of 25k of dividends plus \$30k in RMDS and then showing the impact of additional pre-tax withdrawals?
Yes. That's a common way of looking at the question: start with "unavoidable" income and then look at the marginal tax rate for incurring additional income. The "additional income" is often Roth conversion amounts, but the principle is the same.
Is this estimating federal tax only?
No, it includes California state tax also.
What does being less than 65 years old have to do with anything?
The standard deduction is higher for age 65+.

Does that help?
Yes, thanks
single2019
Posts: 339
Joined: Thu May 27, 2021 12:13 pm

### Re: Simple Calculator For Estimating Income Taxes in Retirement

thedaybeforetoday wrote: Fri Aug 02, 2024 4:35 am
MathWizard wrote: Wed Jul 31, 2024 10:25 pm
catchinup wrote: Wed Jul 31, 2024 10:20 pm Is there a simple calculator online that will estimate my state & federal income tax assuming the following annual income in retirement:

Taxable Account Dividends = 25k
Inherited TIRA RMD = 30k

Total = 100k

The taxable account dividends come from VTSAX and VFWAX so mostly taxable on both state and federal returns. I realize there is some foreign tax credit possible for VFWAX but it can be ignored for my purposes. I just want to get a rough estimate of my tax liability based on the pre-tax income outlined above. I live in California, filing single. I would take the standard deduction.
https://smartasset.com/taxes/california-tax-calculator

FYI for all, the above calculator posted by smart asset is no longer valid in CT if one has a pension or annuity withdraws, and income under 100k mfj.
Laws around pensions/annuity income being taxable for those under 100k have changed in CT, and smart asset has yet to alter their calculator for CT regarding said laws.
I've sent them several notes of feedback about this issue, and when I check occassionally, still hasn't been fixed.
YMMV
Similar problem with smart asset calculator for New Jersey.
ETA: since NJ tax brackets are not adjusted for inflation, you can use the 2023/2024 version for future taxes
wtjbatman
Posts: 63
Joined: Fri Dec 06, 2013 9:55 am
Location: Minnesota

### Re: Simple Calculator For Estimating Income Taxes in Retirement

Been trying to estimate taxes during retirement and I definitely feel there must be a calculator or tool available to make it easier.

For example, a tool or calculator where I can input my income sources and amounts at retirement for my wife and I:
Pension
457b