On 11/27/15 5:02 PM, Jack wrote:
I just turned 62 and started to receive my retirement benefits, but
don't have a clue on how to calculate what percentage of benefits should
be with held. Can someone give me some guidance on whether 7, 10, 15 or
25% should be with held from my benefits?
That depends on several factors, such as what other income sources
(spouse income, interest, IRA withdrawals, etc) you may have.
To give you a basic idea, I have about 32K in SS benefits plus about
22K in "other income". I have 10% withheld to cover both the "other"
income, and any *taxable portion* of SS benefits (usually about 27%,
or about $9800). With that w/h of $3600 I usually get about a $1500
refund.
Your best bet is to fill out a "what-if" IRS1040, and see what the
result is.
https://www.irs.gov/pub/irs-pdf/f1040.pdf
If it happens that your SS benefit is your *only* income, you may not
need to do any withholding as you will owe no tax after the standard
deduction and exemptions.
Also, you will need to get to know the IRS worksheet for figuring the
taxes (if any) on your SS benefits. It is a sliding scale from 0 to
85% *of the benefits* that become *subject to* whatever your bracket
rate is. See IRS Pub
https://www.irs.gov/pub/irs-pdf/p915.pdf
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