Blocks Peoples 2D - Zent Design 2D - Escalas Humanas 2D Autocad
Tax-Efficient Harvesting Strategies From Retirement …...2020/07/31 · Judge Learned Hand -...
40
expertise. Tax - Efficient Harvesting Strategies From Retirement Portfolios Presented by: David Cechanowicz, JD
Transcript of Tax-Efficient Harvesting Strategies From Retirement …...2020/07/31 · Judge Learned Hand -...
-
expertise.
Tax-Efficient Harvesting Strategies From Retirement Portfolios
Presented by:
David Cechanowicz, JD
-
Taxes in Retirement
-
480,804
197,651139,713
80,92140,078
0
100,000
200,000
300,000
400,000
500,000
600,000
Minimum AGI
AGI Cut-off for Top US Taxpayer PercentagesTax Foundation, Nov 2018
Top 1% Top 5% Top 10% Top 25% Top 50%
-
NET INCOME IS WHAT MATTERS
Source: Calculations using BNA Income Tax Planner, couple married filing jointly, both age 65, 2020, standard deductions and personal exemptions, NM State.
$67,864
$61,194
$57,983
$75,000
$68,292
$74,102$75,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
Rental Income Wages Self Employment Social Security 24K SS / 51K OI 51K SS / 24K OI Roth IRA
$75,000 Income – NM State / Social Security / Federal Taxes
-
The Real Tax System in Retirement
-
The Headlines
Tax-Efficient Spending Strategies From Retirement Portfolios
Tax-savvy withdrawals in retirement -Fidelity
Tax-efficient retirement withdrawal strategies - Forbes
Five Do’s and Don’ts for Tax-efficient Retirement Withdrawals - Schwab
-
From Account to Account
-
Proportionate Withdrawals
-
Case Study
$750,000 - IRA
$750,000 Taxable Account
Withdraw $80,000 yr.
“Social Security”8% return IRA, 7% Taxable
How to sequence?
-
Two Buckets – Taxable / Retirement
-
Two Buckets – Taxable / Retirement
-
Two Buckets – Taxable / Retirement
-
What is frequently missed?
-
It’s Not Just About the Brackets
2020 Federal Ordinary Income
Tax RatesSingle Married Filing Joint
Std. Deduction $12,400 $24,80010% $0 – $9,875 $0 – $19,75012% $9,876 – $40,125 $19,751 – $80,250
22% $40,126 – $85,525 $80,251 – $171,050
24% $85,526 – $163,300 $171,051 - $326,600
32% $163,301- $207,350 $326,601 – $414,700
35% $207,351 – $518,400 $414,701 – $622,050
37% $518,401 + $622,051 +
-
0%
10%
20%
30%
40%
50%
60%
0 10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
Middle Income MFJ Taxpayers
12%10% Ordinary Income Brackets
22%
Standard Deduction
-
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0 20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
260,000
280,000
300,000
320,000
340,000
360,000
380,000
400,000
420,000
440,000
460,000
480,000
500,000
520,000
540,000
560,000
580,000
600,000
620,000
640,000MFJ Long Term Gain / Qualified Dividend Brackets – 2020
LT Capital Gain / Qual Dividend
Taxable Income Capital Gains Brackets
$0 - $80,000 0%
$80,001 - $496,600 15%
$496,601+ 20%
-
Case Study
Ted PIA $2,255 – Age 64
Melinda PIA $1,200 – Age 62
Household Revenue:$72,000 – early claim IRAand pension
LE 85 / 90
-
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Early Claim Late Claim
OtherInc.
SocialSecurity
76%
30
42
53
19
Ted and Melinda Claiming Alternative
-
0%
10%
20%
30%
40%
50%
60%
0 10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
12%10% Ordinary Income Brackets
22%
Effective Marginal Rate
Middle Income Married Filing Joint Tax Brackets $72,000 Household Revenue – $42,000 OI / $30,000 SS
$42,000 Ordinary Income @22.3%
-
0%
10%
20%
30%
40%
50%
60%
0 10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000Middle Income Married Filing Joint Tax Brackets
$72,000 Household Revenue – $21,000 OI / $51,000 SS
12%10% Ordinary Income Brackets
22%18.5%
22%
40.8%
$21,000 OI @ 18.5%
-
What is the net tax bill?
State 42 OI / 30 SS 21 OI / 51 SS ReductionAZ 3,848 30 99%
IL 5,482 1,213 78%
CO 4,079 173 96%
GA 5,238 801 85%
OH 4,171 173 95%
NM 4,546 35 99%
NV / FL / WY 3,403 173 95%
NYC 5,084 371 93%
RI 4,654 301 94%
OR 5,668 766 86%
Combined State / Federal Taxes - 2020
Average - $4,617 vs. $404– Reduction of 91%Source: BNA Income Tax Planner Software with 50 States ModuleBoth assumptions 2020 tax year, standard deduction increased for both options.
-
John and Jane – MFJ – 65+
$74,000 combined Social Security
$15,000 of Net Long Term Capital Gains
$18,000 IRA Distributions
$24,000 Pensions
*Example used as illustration only and is not indicative of any particular situation. Actual results will vary.
Case Study – Super Marginal Rates
-
0%
10%
20%
30%
40%
50%
60%
0 10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000Middle Income Married Filing Joint Tax Brackets
SS $74,000, Pensions $24,000, LTCG, $15,000, IRA Withdrawals $18,000
12%10%
Ordinary Income Brackets
22%18.5%22.3%
40.8%
49.95%
Effective Marginal Rate
15%
Capital Gain Brackets
$10,000 IRA Withdrawal$10,000 IRA$ 8,500 SS @ 12% $2,525$15,000 LTCG @ 15%: $2,250
$4,775
-
Where should the next $20,000 come from?
-
Where should the next $20,000 come from?
-
Where should the next $20,000 come from?
Source Taxpayer 1 Taxpayer 2 Taxpayer3
Social Security $45,000 $45,000 $55,000
Interest and Dividends NQ $10,000 $10,000 $10,000
IRA / Pension $24,000 $50,000 $60,000
Total Income: $79,000 $105,000 $125,000
-
1. Delay Social Security2. Retirement Plan withdrawal3. Tax Free municipal Bonds4. Qualified Dividend income5. REIT income with 20% QBD6. Investment Real Estate Sheltered by Depreciation
o 90% Taxableo 70% Taxableo 50% Taxableo 25% Taxableo 0% Taxable – Fully Sheltered
7. Long Term Capital Gainso 100% Gaino 85% Gaino 50% Gaino 35% Gaino 20% Gain
Options for income:
-
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Income taxes on $20,000 of additional income
79k 105k 125k
-
$79,000 Base Income
Source Increased
Tax
Tax Rate on additional
income
1 Investment Real Estate 100% Sheltered - 0.0%
2 LTCG 20% Taxable 672 3.4%
3 LTCG 35% Taxable 1,177 5.9%
4 Social Security 1,436 7.2%
5 Investment Real Estate 75% Sheltered 1,563 7.8%
6 LTCG 50% Taxable 1,681 8.4%
7 LTCG 85% Taxable 2,858 14.3%
8 Tax Exempt Bonds 2,873 14.4%
9 Investment Real Estate 50% Sheltered 3,126 15.6%
10 LTCG 100% Taxable 3,363 16.8%
11 Qualified Dividends 3,853 19.3%
12 Investment Real Estate 30% Sheltered 4,377 21.9%
13 REIT with 20% QBD 5,002 25.0%
14 Investment Real Estate 10% Sheltered 5,627 28.1%
15 Qualified Distribution - Ordinary Income 6,253 31.3%
Main
Income Tax by Source of Income - State and Federal Taxes
Assumptions: MFJ / 65+ Tax Year 2019 BNA income tax planner, v. 2019.1S
Source of additional income: Qualified DividendsTax ExemptIRA50% Long Term Cap GainSocial SecurityREIT with 20% QBDInv. Real Estate 50% Dep
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRAIRAIRAIRA
LT Capital GainsLT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate- 0Inv Real EstateInv Real Estate10,000
79,00099,00099,00099,00089,00099,00099,00089,000
State/Federal Tax3,197State/Federal Tax7,050State/Federal Tax6,070State/Federal Tax9,450State/Federal Tax4,878State/Federal Tax4,633State/Federal Tax8,199State/Federal Tax6,323
Tax on Extra3,853Tax on Extra2,873Tax on Extra6,253Tax on Extra1,681Tax on Extra1,436Tax on Extra5,002Tax on Extra3,126
Rate on Extra19.27%Rate on Extra14.37%Rate on Extra31.27%Rate on Extra8.41%Rate on Extra7.18%Rate on Extra25.01%Rate on Extra15.63%
5372164
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRAIRAIRAIRA
LT Capital GainsLT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate- 0Inv Real EstateInv Real Estate 50% 10,000
105,000125,000125,000125,000115,000125,000125,000115,000
State/Federal Tax11,245State/Federal Tax14,100State/Federal Tax11,245State/Federal Tax15,855State/Federal Tax11,865State/Federal Tax12,890State/Federal Tax14,779State/Federal Tax13,165
Tax on Extra2,855Tax on Extra- 0Tax on Extra4,610Tax on Extra620Tax on Extra1,645Tax on Extra3,534Tax on Extra1,920
Rate on Extra14.28%Rate on Extra0.00%Rate on Extra23.05%Rate on Extra3.10%Rate on Extra8.23%Rate on Extra17.67%Rate on Extra9.60%
5172364
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Interest & Dividends10,000
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRA- 0IRA- 0IRA- 0IRA
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate 50%10,000
125,000145,000145,000145,000135,000145,000145,000135,000
State/Federal Tax 15,452State/Federal Tax19,432State/Federal Tax15,452State/Federal Tax20,832State/Federal Tax17,197State/Federal Tax19,010State/Federal Tax19,756State/Federal Tax18,142
Tax on Extra3,980Tax on Extra- 0Tax on Extra5,380Tax on Extra1,745Tax on Extra3,558Tax on Extra4,304Tax on Extra2,690
Rate on Extra19.9%Rate on Extra0.00%Rate on Extra26.9%Rate on Extra8.7%Rate on Extra17.8%Rate on Extra21.5%Rate on Extra13.45%
5172463
The information presented here is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant or investment advisor. Each individual's income tax status is unique and this information is provided to illustrate the fact that professional assistance may be required in structuring tax efficient income in retirement. Income tax results will vary by state, this illustration assumes New Mexico income tax rates.
Real Estate
Source of additional income: Real Estate + Depreciation10% Real Estate + Depreciation 30% Real Estate + Depreciation 50%Real Estate + Depreciation 75% Real Estate + Depreciation 100%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
Real Estate with DepreciationReal Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00097,00093,00089,00084,00079,000
State/Federal Tax3,197State/Federal Tax8,824State/Federal Tax7,574State/Federal Tax6,323State/Federal Tax4,760State/Federal Tax3,197
Tax on Extra5,627Tax on Extra4,377Tax on Extra3,126Tax on Extra1,563Tax on Extra- 0
Rate on Extra28.14%Rate on Extra21.89%Rate on Extra15.63%Rate on Extra7.82%Rate on ExtraNone
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000123,000119,000115,000110,000105,000
State/Federal Tax11,245State/Federal Tax15,317State/Federal Tax14,241State/Federal Tax13,165State/Federal Tax12,090State/Federal Tax11,245
Tax on Extra4,072Tax on Extra2,996Tax on Extra1,920Tax on Extra845Tax on Extra- 0
Rate on Extra20.36%Rate on Extra14.98%Rate on Extra9.60%Rate on Extra4%Rate on ExtraNone
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
- 0- 0- 0- 0- 0
125,000143,000139,000135,000130,000125,000
State/Federal Tax 15,452State/Federal Tax20,294State/Federal Tax19,218State/Federal Tax18,142State/Federal Tax16,797State/Federal Tax15,452
Tax on Extra4,842Tax on Extra3,766Tax on Extra2,690Tax on Extra1,345Tax on Extra- 0
Rate on Extra24.2%Rate on Extra18.8%Rate on Extra13.5%Rate on Extra6.7%Rate on ExtraNone
LTCG
Source of additional income: Long Term Cap Gain 100%Long Term Cap Gain 85%Long Term Cap Gain 50%Long Term Cap Gain 35%Long Term Cap Gain 20%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00099,00096,00089,00086,00083,000
State/Federal Tax3,197State/Federal Tax6,560State/Federal Tax6,055State/Federal Tax4,878State/Federal Tax4,374State/Federal Tax3,869
Tax on Extra3,363Tax on Extra2,858Tax on Extra1,681Tax on Extra1,177Tax on Extra672
Rate on Extra16.82%Rate on Extra14.29%Rate on Extra8.41%Rate on Extra5.89%Rate on Extra3.36%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000125,000125,000125,000125,000125,000
State/Federal Tax11,245State/Federal Tax13,610State/Federal Tax13,087State/Federal Tax11,865State/Federal Tax11,417State/Federal Tax11,343
Tax on Extra2,365Tax on Extra1,842Tax on Extra620Tax on Extra172Tax on Extra98
Rate on Extra11.83%Rate on Extra9.21%Rate on Extra3.10%Rate on Extra0.86%Rate on Extra0.49%
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
LT Capital Gains- 0- 0- 0- 0- 0
125,000145,000145,000145,000145,000145,000
State/Federal Tax 15,452State/Federal Tax18,942State/Federal Tax18,418State/Federal Tax17,197State/Federal Tax16,673State/Federal Tax16,150
Tax on Extra3,490Tax on Extra2,966Tax on Extra1,745Tax on Extra1,221Tax on Extra698
Rate on Extra17.5%Rate on Extra14.8%Rate on Extra8.7%Rate on Extra6.1%Rate on Extra3.5%
Consolidated 79 SF
79K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:45,000
Interest and Dividends10,000
Pension24,000
Total Income$ 79,000
SourceIncreased TaxTax Rate on additional income
1Investment Real Estate 100% Sheltered- 000.0%
2LTCG 20% Taxable6726723.4%
3LTCG 35% Taxable1,17711775.9%
4Social Security1,43614367.2%
5Investment Real Estate 75% Sheltered1,56315637.8%
6LTCG 50% Taxable1,68116818.4%
7LTCG 85% Taxable2,858285814.3%
8Tax Exempt Bonds2,873287314.4%
9Investment Real Estate 50% Sheltered3,126312615.6%
10LTCG 100% Taxable3,363336316.8%
11Qualified Dividends3,853385319.3%
12Investment Real Estate 30% Sheltered4,377437721.9%
13REIT with 20% QBD5,002500225.0%
14Investment Real Estate 10% Sheltered5,627562728.1%
15Qualified Distribution - Ordinary Income6,253625331.3%
Consolidated 105
105K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:45,000
Interest and Dividends10,000
Pension50,000
Total Income$105,000
SourceIncreased TaxTax Rate on additional income
1Investment Real Estate 100% Sheltered- 0- 00.0%
2Tax Exempt Bonds- 0- 00.0%
3LTCG 20% Taxable98980.5%
4LTCG 35% Taxable1721720.9%
5LTCG 50% Taxable6206203.1%
6Investment Real Estate 75% Sheltered8458454.2%
7Social Security1,6451,6458.2%
8LTCG 85% Taxable1,8421,8429.2%
9Investment Real Estate 50% Sheltered1,9201,9209.6%
10LTCG 100% Taxable2,3652,36511.8%
11Qualified Dividends2,8552,85514.3%
12Investment Real Estate 30% Sheltered2,9962,99615.0%
13REIT with 20% QBD3,5343,53417.7%
14Investment Real Estate 10% Sheltered4,0724,07220.4%
15Qualified Distribution - Ordinary Income4,6104,61023.1%
Consolidated 125 SF
125K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:55,000
Interest and Dividends10,000
Pension60,000
Total Income$ 125,000
SourceIncreased TaxTax Rate on Additional Income
1Investment Real Estate 100% Sheltered- 0- 00.0%
2Tax Exempt Bonds- 0- 00.0%
3LTCG 20% Taxable6986983.5%
4LTCG 35% Taxable1,2211,2216.1%
5Investment Real Estate 75% Sheltered1,3451,3456.7%
6LTCG 50% Taxable1,7451,7458.7%
7Investment Real Estate 50% Sheltered2,6902,69013.5%
8LTCG 85% Taxable2,9662,96614.8%
9LTCG 100% Taxable3,4903,49017.5%
10Social Security3,5583,55817.8%
11Investment Real Estate 30% Sheltered3,7663,76618.8%
12Qualified Dividends3,9803,98019.9%
13REIT with 20% QBD4,3044,30421.5%
14Investment Real Estate 10% Sheltered4,8424,84224.2%
15Qualified Distribution - Ordinary Income5,3805,38026.9%
cons 11x17
Income Tax by Source of Income - State and Federal Taxes
Assumptions: MFJ / 65+ Tax Year 2019 BNA income tax planner, v. 2019.1S
79K Base Income - Add $20,000 from various income sources105K Base Income - Add $20,000 from various income sources125K Base Income - Add $20,000 from various income sources
Income SourcesIncome SourcesIncome Sources
Social Security:45,000Social Security:45,000Social Security:55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Pension24,000Pension50,000Pension60,000
Total Income79,000Total Income$105,000Total Income125,000
SourceIncreased TaxTax Rate on additional incomeSourceIncreased TaxTax Rate on additional income SourceIncreased TaxTax Rate on Additional Income
1Inv Real Estate 100% Sheltered- 0- 00.0%1Inv Real Estate 100% Sheltered- 0- 00.0%1Inv Real Estate 100% Sheltered- 0- 00.0%
2LTCG 20% Taxable6726723.4%2Tax Exempt Bonds- 0- 00.0%2Tax Exempt Bonds- 0- 00.0%
3LTCG 35% Taxable1,1771,1775.9%3LTCG 20% Taxable98980.5%3LTCG 20% Taxable6986983.5%
4Social Security1,4361,4367.2%4LTCG 35% Taxable1721720.9%4LTCG 35% Taxable1,2211,2216.1%
5Inv Real Estate 75% Sheltered1,5631,5637.8%5LTCG 50% Taxable6206203.1%5Inv Real Estate 75% Sheltered1,3451,3456.7%
6LTCG 50% Taxable1,6811,6818.4%6Inv Real Estate 75% Sheltered8458454.2%6LTCG 50% Taxable1,7451,7458.7%
7LTCG 85% Taxable2,8582,85814.3%7Social Security1,6451,6458.2%7Inv Real Estate 50% Sheltered2,6902,69013.5%
8Tax Exempt Bonds2,8732,87314.4%8LTCG 85% Taxable1,8421,8429.2%8LTCG 85% Taxable2,9662,96614.8%
9Inv Real Estate 50% Sheltered3,1263,12615.6%9Inv Real Estate 50% Sheltered1,9201,9209.6%9LTCG 100% Taxable3,4903,49017.5%
10LTCG 100% Taxable3,3633,36316.8%10LTCG 100% Taxable2,3652,36511.8%10Social Security3,5583,55817.8%
11Qualified Dividends3,8533,85319.3%11Qualified Dividends2,8552,85514.3%11Inv Real Estate 30% Sheltered3,7663,76618.8%
12Inv Real Estate 30% Sheltered4,3774,37721.9%12Inv Real Estate 30% Sheltered2,9962,99615.0%12Qualified Dividends3,9803,98019.9%
13REIT with 20% QBD5,0025,00225.0%13REIT with 20% QBD3,5343,53417.7%13REIT with 20% QBD4,3044,30421.5%
14Inv Real Estate 10% Sheltered5,6275,62728.1%14Inv Real Estate 10% Sheltered4,0724,07220.4%14Inv Real Estate 10% Sheltered4,8424,84224.2%
15Qualified Distribution - Ord Inc6,2536,25331.3%15Qualified Distribution - Ord Inc4,6104,61023.1%15Qualified Distribution - Ord Inc5,3805,38026.9%
The information presented here is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant or investment advisor. Each individual's income tax status is unique and this information is provided to illustrate the fact that professional assistance may be required in structuring tax efficient income in retirement. Income tax results will vary by state, this illustration assumes New Mexico income tax rates.
Consolidated Graph
79k105k125k
0.010.010.01
6720.010.01
117798698
14361721221
15636201345
16818451745
285816452690
287318422966
312619203490
336323653558
385328553766
437729963980
500235344304
562740724842
625346105380
Income taxes on $20,000 of additional income
79k0.016721177143615631681285828733126336338534377500256276253105k0.010.0198172620845164518421920236528552996353440724610125k0.010.01698122113451745269029663490355837663980430448425380
Graph79 +20
Qualified DividendsTax ExemptIRACapital GainsSocial Security
Tax38532873625316811020
Qualified DividendsTax ExemptIRACapital GainsSocial Security38532873625316811020
Graph105+20
Qualified DividendsTax ExemptIRACapital GainsSocial Security
Tax18750363018751205
Qualified DividendsTax ExemptIRACapital GainsSocial Security18750363018751205
Graph125+20
Qualified DividendsTax ExemptIRACapital GainsSocial Security
Tax39800538017453558
Qualified DividendsTax ExemptIRACapital GainsSocial Security39800538017453558
Graph Combined
Qualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD
79K Base3,8532,8736,2531,6811,4363,552
105K Base2,855- 04,6106201,2052,750
125K Base3,980- 05,3803,4903,5584,304
79K BaseQualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD385328736253168114363552105K BaseQualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD28550461062012052750125K BaseQualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD398005380349035584304
Real Estate SF
Source of additional income: Real Estate + Depreciation 10%Real Estate + Depreciation 20%Real Estate + Depreciation 50%Real Estate + Depreciation 80%Real Estate + Depreciation 100%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
Real Estate with DepreciationReal Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00097,00093,00089,00084,00079,000
State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0
Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0
Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000123,000119,000115,000110,000105,000
State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0
Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0
Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0%Rate on ExtraNone
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
- 0- 0- 0- 0- 0
125,000143,000139,000135,000130,000125,000
State/Federal Tax - 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0
Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0
Rate on Extra0.0%Rate on Extra0.0%Rate on Extra0.0%Rate on Extra0.0%Rate on ExtraNone
LTCG SF
Source of additional income: Long Term Cap Gain 100%Long Term Cap Gain 85%Long Term Cap Gain 50%Long Term Cap Gain 35%Long Term Cap Gain 20%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00099,00096,00089,00086,00083,000
State/Federal Tax2,447State/Federal Tax6,560State/Federal Tax6,055State/Federal Tax4,878State/Federal Tax4,374State/Federal Tax3,869
Tax on Extra4,113Tax on Extra3,608Tax on Extra2,431Tax on Extra1,927Tax on Extra1,422
Rate on Extra20.57%Rate on Extra18.04%Rate on Extra12.16%Rate on Extra9.64%Rate on Extra7.11%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000125,000122,000115,000112,000109,000
State/Federal Tax11,245State/Federal Tax13,610State/Federal Tax13,087State/Federal Tax11,865State/Federal Tax11,417State/Federal Tax11,343
Tax on Extra2,365Tax on Extra1,842Tax on Extra620Tax on Extra172Tax on Extra98
Rate on Extra11.83%Rate on Extra10.84%Rate on Extra6.20%Rate on Extra2.46%Rate on Extra2.45%
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
LT Capital Gains- 0- 0- 0- 0- 0
125,000145,000145,000145,000145,000145,000
State/Federal Tax 15,452State/Federal Tax18,942State/Federal Tax18,418State/Federal Tax17,197State/Federal Tax16,673State/Federal Tax16,150
Tax on Extra3,490Tax on Extra2,966Tax on Extra1,745Tax on Extra1,221Tax on Extra698
Rate on Extra17.5%Rate on Extra14.8%Rate on Extra8.7%Rate on Extra6.1%Rate on Extra3.5%
-
$105,000 Base Income
Source Increased
Tax
Tax Rate on additional
income
1 Investment Real Estate 100% Sheltered - 0.0%
2 Tax Exempt Bonds - 0.0%
3 LTCG 20% Taxable 98 0.5%
4 LTCG 35% Taxable 172 0.9%
5 LTCG 50% Taxable 620 3.1%
6 Investment Real Estate 75% Sheltered 845 4.2%
7 Social Security 1,645 8.2%
8 LTCG 85% Taxable 1,842 9.2%
9 Investment Real Estate 50% Sheltered 1,920 9.6%
10 LTCG 100% Taxable 2,365 11.8%
11 Qualified Dividends 2,855 14.3%
12 Investment Real Estate 30% Sheltered 2,996 15.0%
13 REIT with 20% QBD 3,534 17.7%
14 Investment Real Estate 10% Sheltered 4,072 20.4%
15 Qualified Distribution - Ordinary Income 4,610 23.1%
Main
Income Tax by Source of Income - State and Federal Taxes
Assumptions: MFJ / 65+ Tax Year 2019 BNA income tax planner, v. 2019.1S
Source of additional income: Qualified DividendsTax ExemptIRA50% Long Term Cap GainSocial SecurityREIT with 20% QBDInv. Real Estate 50% Dep
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRAIRAIRAIRA
LT Capital GainsLT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate- 0Inv Real EstateInv Real Estate10,000
79,00099,00099,00099,00089,00099,00099,00089,000
State/Federal Tax3,197State/Federal Tax7,050State/Federal Tax6,070State/Federal Tax9,450State/Federal Tax4,878State/Federal Tax4,633State/Federal Tax8,199State/Federal Tax6,323
Tax on Extra3,853Tax on Extra2,873Tax on Extra6,253Tax on Extra1,681Tax on Extra1,436Tax on Extra5,002Tax on Extra3,126
Rate on Extra19.27%Rate on Extra14.37%Rate on Extra31.27%Rate on Extra8.41%Rate on Extra7.18%Rate on Extra25.01%Rate on Extra15.63%
5372164
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRAIRAIRAIRA
LT Capital GainsLT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate- 0Inv Real EstateInv Real Estate 50% 10,000
105,000125,000125,000125,000115,000125,000125,000115,000
State/Federal Tax11,245State/Federal Tax14,100State/Federal Tax11,245State/Federal Tax15,855State/Federal Tax11,865State/Federal Tax12,890State/Federal Tax14,779State/Federal Tax13,165
Tax on Extra2,855Tax on Extra- 0Tax on Extra4,610Tax on Extra620Tax on Extra1,645Tax on Extra3,534Tax on Extra1,920
Rate on Extra14.28%Rate on Extra0.00%Rate on Extra23.05%Rate on Extra3.10%Rate on Extra8.23%Rate on Extra17.67%Rate on Extra9.60%
5172364
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Interest & Dividends10,000
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRA- 0IRA- 0IRA- 0IRA
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate 50%10,000
125,000145,000145,000145,000135,000145,000145,000135,000
State/Federal Tax 15,452State/Federal Tax19,432State/Federal Tax15,452State/Federal Tax20,832State/Federal Tax17,197State/Federal Tax19,010State/Federal Tax19,756State/Federal Tax18,142
Tax on Extra3,980Tax on Extra- 0Tax on Extra5,380Tax on Extra1,745Tax on Extra3,558Tax on Extra4,304Tax on Extra2,690
Rate on Extra19.9%Rate on Extra0.00%Rate on Extra26.9%Rate on Extra8.7%Rate on Extra17.8%Rate on Extra21.5%Rate on Extra13.45%
5172463
The information presented here is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant or investment advisor. Each individual's income tax status is unique and this information is provided to illustrate the fact that professional assistance may be required in structuring tax efficient income in retirement. Income tax results will vary by state, this illustration assumes New Mexico income tax rates.
Real Estate
Source of additional income: Real Estate + Depreciation10% Real Estate + Depreciation 30% Real Estate + Depreciation 50%Real Estate + Depreciation 75% Real Estate + Depreciation 100%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
Real Estate with DepreciationReal Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00097,00093,00089,00084,00079,000
State/Federal Tax3,197State/Federal Tax8,824State/Federal Tax7,574State/Federal Tax6,323State/Federal Tax4,760State/Federal Tax3,197
Tax on Extra5,627Tax on Extra4,377Tax on Extra3,126Tax on Extra1,563Tax on Extra- 0
Rate on Extra28.14%Rate on Extra21.89%Rate on Extra15.63%Rate on Extra7.82%Rate on ExtraNone
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000123,000119,000115,000110,000105,000
State/Federal Tax11,245State/Federal Tax15,317State/Federal Tax14,241State/Federal Tax13,165State/Federal Tax12,090State/Federal Tax11,245
Tax on Extra4,072Tax on Extra2,996Tax on Extra1,920Tax on Extra845Tax on Extra- 0
Rate on Extra20.36%Rate on Extra14.98%Rate on Extra9.60%Rate on Extra4%Rate on ExtraNone
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
- 0- 0- 0- 0- 0
125,000143,000139,000135,000130,000125,000
State/Federal Tax 15,452State/Federal Tax20,294State/Federal Tax19,218State/Federal Tax18,142State/Federal Tax16,797State/Federal Tax15,452
Tax on Extra4,842Tax on Extra3,766Tax on Extra2,690Tax on Extra1,345Tax on Extra- 0
Rate on Extra24.2%Rate on Extra18.8%Rate on Extra13.5%Rate on Extra6.7%Rate on ExtraNone
LTCG
Source of additional income: Long Term Cap Gain 100%Long Term Cap Gain 85%Long Term Cap Gain 50%Long Term Cap Gain 35%Long Term Cap Gain 20%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00099,00096,00089,00086,00083,000
State/Federal Tax3,197State/Federal Tax6,560State/Federal Tax6,055State/Federal Tax4,878State/Federal Tax4,374State/Federal Tax3,869
Tax on Extra3,363Tax on Extra2,858Tax on Extra1,681Tax on Extra1,177Tax on Extra672
Rate on Extra16.82%Rate on Extra14.29%Rate on Extra8.41%Rate on Extra5.89%Rate on Extra3.36%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000125,000125,000125,000125,000125,000
State/Federal Tax11,245State/Federal Tax13,610State/Federal Tax13,087State/Federal Tax11,865State/Federal Tax11,417State/Federal Tax11,343
Tax on Extra2,365Tax on Extra1,842Tax on Extra620Tax on Extra172Tax on Extra98
Rate on Extra11.83%Rate on Extra9.21%Rate on Extra3.10%Rate on Extra0.86%Rate on Extra0.49%
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
LT Capital Gains- 0- 0- 0- 0- 0
125,000145,000145,000145,000145,000145,000
State/Federal Tax 15,452State/Federal Tax18,942State/Federal Tax18,418State/Federal Tax17,197State/Federal Tax16,673State/Federal Tax16,150
Tax on Extra3,490Tax on Extra2,966Tax on Extra1,745Tax on Extra1,221Tax on Extra698
Rate on Extra17.5%Rate on Extra14.8%Rate on Extra8.7%Rate on Extra6.1%Rate on Extra3.5%
Consolidated 79 SF
79K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:45,000
Interest and Dividends10,000
Pension24,000
Total Income$ 79,000
SourceIncreased TaxTax Rate on additional income
1Investment Real Estate 100% Sheltered- 000.0%
2LTCG 20% Taxable6726723.4%
3LTCG 35% Taxable1,17711775.9%
4Social Security1,43614367.2%
5Investment Real Estate 75% Sheltered1,56315637.8%
6LTCG 50% Taxable1,68116818.4%
7LTCG 85% Taxable2,858285814.3%
8Tax Exempt Bonds2,873287314.4%
9Investment Real Estate 50% Sheltered3,126312615.6%
10LTCG 100% Taxable3,363336316.8%
11Qualified Dividends3,853385319.3%
12Investment Real Estate 30% Sheltered4,377437721.9%
13REIT with 20% QBD5,002500225.0%
14Investment Real Estate 10% Sheltered5,627562728.1%
15Qualified Distribution - Ordinary Income6,253625331.3%
Consolidated 105
105K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:45,000
Interest and Dividends10,000
Pension50,000
Total Income$105,000
SourceIncreased TaxTax Rate on additional income
1Investment Real Estate 100% Sheltered- 0- 00.0%
2Tax Exempt Bonds- 0- 00.0%
3LTCG 20% Taxable98980.5%
4LTCG 35% Taxable1721720.9%
5LTCG 50% Taxable6206203.1%
6Investment Real Estate 75% Sheltered8458454.2%
7Social Security1,6451,6458.2%
8LTCG 85% Taxable1,8421,8429.2%
9Investment Real Estate 50% Sheltered1,9201,9209.6%
10LTCG 100% Taxable2,3652,36511.8%
11Qualified Dividends2,8552,85514.3%
12Investment Real Estate 30% Sheltered2,9962,99615.0%
13REIT with 20% QBD3,5343,53417.7%
14Investment Real Estate 10% Sheltered4,0724,07220.4%
15Qualified Distribution - Ordinary Income4,6104,61023.1%
Consolidated 125 SF
125K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:55,000
Interest and Dividends10,000
Pension60,000
Total Income$ 125,000
SourceIncreased TaxTax Rate on Additional Income
1Investment Real Estate 100% Sheltered- 0- 00.0%
2Tax Exempt Bonds- 0- 00.0%
3LTCG 20% Taxable6986983.5%
4LTCG 35% Taxable1,2211,2216.1%
5Investment Real Estate 75% Sheltered1,3451,3456.7%
6LTCG 50% Taxable1,7451,7458.7%
7Investment Real Estate 50% Sheltered2,6902,69013.5%
8LTCG 85% Taxable2,9662,96614.8%
9LTCG 100% Taxable3,4903,49017.5%
10Social Security3,5583,55817.8%
11Investment Real Estate 30% Sheltered3,7663,76618.8%
12Qualified Dividends3,9803,98019.9%
13REIT with 20% QBD4,3044,30421.5%
14Investment Real Estate 10% Sheltered4,8424,84224.2%
15Qualified Distribution - Ordinary Income5,3805,38026.9%
cons 11x17
Income Tax by Source of Income - State and Federal Taxes
Assumptions: MFJ / 65+ Tax Year 2019 BNA income tax planner, v. 2019.1S
79K Base Income - Add $20,000 from various income sources105K Base Income - Add $20,000 from various income sources125K Base Income - Add $20,000 from various income sources
Income SourcesIncome SourcesIncome Sources
Social Security:45,000Social Security:45,000Social Security:55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Pension24,000Pension50,000Pension60,000
Total Income79,000Total Income$105,000Total Income125,000
SourceIncreased TaxTax Rate on additional incomeSourceIncreased TaxTax Rate on additional income SourceIncreased TaxTax Rate on Additional Income
1Inv Real Estate 100% Sheltered- 0- 00.0%1Inv Real Estate 100% Sheltered- 0- 00.0%1Inv Real Estate 100% Sheltered- 0- 00.0%
2LTCG 20% Taxable6726723.4%2Tax Exempt Bonds- 0- 00.0%2Tax Exempt Bonds- 0- 00.0%
3LTCG 35% Taxable1,1771,1775.9%3LTCG 20% Taxable98980.5%3LTCG 20% Taxable6986983.5%
4Social Security1,4361,4367.2%4LTCG 35% Taxable1721720.9%4LTCG 35% Taxable1,2211,2216.1%
5Inv Real Estate 75% Sheltered1,5631,5637.8%5LTCG 50% Taxable6206203.1%5Inv Real Estate 75% Sheltered1,3451,3456.7%
6LTCG 50% Taxable1,6811,6818.4%6Inv Real Estate 75% Sheltered8458454.2%6LTCG 50% Taxable1,7451,7458.7%
7LTCG 85% Taxable2,8582,85814.3%7Social Security1,6451,6458.2%7Inv Real Estate 50% Sheltered2,6902,69013.5%
8Tax Exempt Bonds2,8732,87314.4%8LTCG 85% Taxable1,8421,8429.2%8LTCG 85% Taxable2,9662,96614.8%
9Inv Real Estate 50% Sheltered3,1263,12615.6%9Inv Real Estate 50% Sheltered1,9201,9209.6%9LTCG 100% Taxable3,4903,49017.5%
10LTCG 100% Taxable3,3633,36316.8%10LTCG 100% Taxable2,3652,36511.8%10Social Security3,5583,55817.8%
11Qualified Dividends3,8533,85319.3%11Qualified Dividends2,8552,85514.3%11Inv Real Estate 30% Sheltered3,7663,76618.8%
12Inv Real Estate 30% Sheltered4,3774,37721.9%12Inv Real Estate 30% Sheltered2,9962,99615.0%12Qualified Dividends3,9803,98019.9%
13REIT with 20% QBD5,0025,00225.0%13REIT with 20% QBD3,5343,53417.7%13REIT with 20% QBD4,3044,30421.5%
14Inv Real Estate 10% Sheltered5,6275,62728.1%14Inv Real Estate 10% Sheltered4,0724,07220.4%14Inv Real Estate 10% Sheltered4,8424,84224.2%
15Qualified Distribution - Ord Inc6,2536,25331.3%15Qualified Distribution - Ord Inc4,6104,61023.1%15Qualified Distribution - Ord Inc5,3805,38026.9%
The information presented here is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant or investment advisor. Each individual's income tax status is unique and this information is provided to illustrate the fact that professional assistance may be required in structuring tax efficient income in retirement. Income tax results will vary by state, this illustration assumes New Mexico income tax rates.
Consolidated Graph
79k105k125k
0.010.010.01
6720.010.01
117798698
14361721221
15636201345
16818451745
285816452690
287318422966
312619203490
336323653558
385328553766
437729963980
500235344304
562740724842
625346105380
Income taxes on $20,000 of additional income
79k0.016721177143615631681285828733126336338534377500256276253105k0.010.0198172620845164518421920236528552996353440724610125k0.010.01698122113451745269029663490355837663980430448425380
Graph79 +20
Qualified DividendsTax ExemptIRACapital GainsSocial Security
Tax38532873625316811020
Qualified DividendsTax ExemptIRACapital GainsSocial Security38532873625316811020
Graph105+20
Qualified DividendsTax ExemptIRACapital GainsSocial Security
Tax18750363018751205
Qualified DividendsTax ExemptIRACapital GainsSocial Security18750363018751205
Graph125+20
Qualified DividendsTax ExemptIRACapital GainsSocial Security
Tax39800538017453558
Qualified DividendsTax ExemptIRACapital GainsSocial Security39800538017453558
Graph Combined
Qualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD
79K Base3,8532,8736,2531,6811,4363,552
105K Base2,855- 04,6106201,2052,750
125K Base3,980- 05,3803,4903,5584,304
79K BaseQualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD385328736253168114363552105K BaseQualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD28550461062012052750125K BaseQualified DividendsTax ExemptIRACapital GainsSocial SecurityREIT with 20% QBD398005380349035584304
Real Estate SF
Source of additional income: Real Estate + Depreciation 10%Real Estate + Depreciation 20%Real Estate + Depreciation 50%Real Estate + Depreciation 80%Real Estate + Depreciation 100%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
Real Estate with DepreciationReal Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00097,00093,00089,00084,00079,000
State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0
Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0
Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000123,000119,000115,000110,000105,000
State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0
Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0
Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0.00%Rate on Extra0%Rate on ExtraNone
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
- 0- 0- 0- 0- 0
125,000143,000139,000135,000130,000125,000
State/Federal Tax - 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0State/Federal Tax- 0
Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0Tax on Extra- 0
Rate on Extra0.0%Rate on Extra0.0%Rate on Extra0.0%Rate on Extra0.0%Rate on ExtraNone
LTCG SF
Source of additional income: Long Term Cap Gain 100%Long Term Cap Gain 85%Long Term Cap Gain 50%Long Term Cap Gain 35%Long Term Cap Gain 20%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00099,00096,00089,00086,00083,000
State/Federal Tax2,447State/Federal Tax6,560State/Federal Tax6,055State/Federal Tax4,878State/Federal Tax4,374State/Federal Tax3,869
Tax on Extra4,113Tax on Extra3,608Tax on Extra2,431Tax on Extra1,927Tax on Extra1,422
Rate on Extra20.57%Rate on Extra18.04%Rate on Extra12.16%Rate on Extra9.64%Rate on Extra7.11%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000125,000122,000115,000112,000109,000
State/Federal Tax11,245State/Federal Tax13,610State/Federal Tax13,087State/Federal Tax11,865State/Federal Tax11,417State/Federal Tax11,343
Tax on Extra2,365Tax on Extra1,842Tax on Extra620Tax on Extra172Tax on Extra98
Rate on Extra11.83%Rate on Extra10.84%Rate on Extra6.20%Rate on Extra2.46%Rate on Extra2.45%
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
LT Capital Gains- 0- 0- 0- 0- 0
125,000145,000145,000145,000145,000145,000
State/Federal Tax 15,452State/Federal Tax18,942State/Federal Tax18,418State/Federal Tax17,197State/Federal Tax16,673State/Federal Tax16,150
Tax on Extra3,490Tax on Extra2,966Tax on Extra1,745Tax on Extra1,221Tax on Extra698
Rate on Extra17.5%Rate on Extra14.8%Rate on Extra8.7%Rate on Extra6.1%Rate on Extra3.5%
-
$125,000 Base Income
Source Increased
Tax
Tax Rate on Additional
Income
1 Investment Real Estate 100% Sheltered - 0.0%
2 Tax Exempt Bonds - 0.0%
3 LTCG 20% Taxable 698 3.5%
4 LTCG 35% Taxable 1,221 6.1%
5 Investment Real Estate 75% Sheltered 1,345 6.7%
6 LTCG 50% Taxable 1,745 8.7%
7 Investment Real Estate 50% Sheltered 2,690 13.5%
8 LTCG 85% Taxable 2,966 14.8%
9 LTCG 100% Taxable 3,490 17.5%
10 Social Security 3,558 17.8%
11 Investment Real Estate 30% Sheltered 3,766 18.8%
12 Qualified Dividends 3,980 19.9%
13 REIT with 20% QBD 4,304 21.5%
14 Investment Real Estate 10% Sheltered 4,842 24.2%
15 Qualified Distribution - Ordinary Income 5,380 26.9%
Main
Income Tax by Source of Income - State and Federal Taxes
Assumptions: MFJ / 65+ Tax Year 2019 BNA income tax planner, v. 2019.1S
Source of additional income: Qualified DividendsTax ExemptIRA50% Long Term Cap GainSocial SecurityREIT with 20% QBDInv. Real Estate 50% Dep
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRAIRAIRAIRA
LT Capital GainsLT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate- 0Inv Real EstateInv Real Estate10,000
79,00099,00099,00099,00089,00099,00099,00089,000
State/Federal Tax3,197State/Federal Tax7,050State/Federal Tax6,070State/Federal Tax9,450State/Federal Tax4,878State/Federal Tax4,633State/Federal Tax8,199State/Federal Tax6,323
Tax on Extra3,853Tax on Extra2,873Tax on Extra6,253Tax on Extra1,681Tax on Extra1,436Tax on Extra5,002Tax on Extra3,126
Rate on Extra19.27%Rate on Extra14.37%Rate on Extra31.27%Rate on Extra8.41%Rate on Extra7.18%Rate on Extra25.01%Rate on Extra15.63%
5372164
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRAIRAIRAIRA
LT Capital GainsLT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate- 0Inv Real EstateInv Real Estate 50% 10,000
105,000125,000125,000125,000115,000125,000125,000115,000
State/Federal Tax11,245State/Federal Tax14,100State/Federal Tax11,245State/Federal Tax15,855State/Federal Tax11,865State/Federal Tax12,890State/Federal Tax14,779State/Federal Tax13,165
Tax on Extra2,855Tax on Extra- 0Tax on Extra4,610Tax on Extra620Tax on Extra1,645Tax on Extra3,534Tax on Extra1,920
Rate on Extra14.28%Rate on Extra0.00%Rate on Extra23.05%Rate on Extra3.10%Rate on Extra8.23%Rate on Extra17.67%Rate on Extra9.60%
5172364
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Int & dividends10,000Interest & Dividends10,000
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
Qualified DividendsQualified Dividends20,000Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax Exempt20,000Tax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
IRAIRAIRAIRA20,000IRA- 0IRA- 0IRA- 0IRA
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains10,000LT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security20,000Social SecuritySocial Security
REIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBDREIT with 20% QBD20,000REIT with 20% QBD
Investment Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real EstateInv Real Estate 50%10,000
125,000145,000145,000145,000135,000145,000145,000135,000
State/Federal Tax 15,452State/Federal Tax19,432State/Federal Tax15,452State/Federal Tax20,832State/Federal Tax17,197State/Federal Tax19,010State/Federal Tax19,756State/Federal Tax18,142
Tax on Extra3,980Tax on Extra- 0Tax on Extra5,380Tax on Extra1,745Tax on Extra3,558Tax on Extra4,304Tax on Extra2,690
Rate on Extra19.9%Rate on Extra0.00%Rate on Extra26.9%Rate on Extra8.7%Rate on Extra17.8%Rate on Extra21.5%Rate on Extra13.45%
5172463
The information presented here is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant or investment advisor. Each individual's income tax status is unique and this information is provided to illustrate the fact that professional assistance may be required in structuring tax efficient income in retirement. Income tax results will vary by state, this illustration assumes New Mexico income tax rates.
Real Estate
Source of additional income: Real Estate + Depreciation10% Real Estate + Depreciation 30% Real Estate + Depreciation 50%Real Estate + Depreciation 75% Real Estate + Depreciation 100%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
Real Estate with DepreciationReal Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0LT Capital Gains- 0
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00097,00093,00089,00084,00079,000
State/Federal Tax3,197State/Federal Tax8,824State/Federal Tax7,574State/Federal Tax6,323State/Federal Tax4,760State/Federal Tax3,197
Tax on Extra5,627Tax on Extra4,377Tax on Extra3,126Tax on Extra1,563Tax on Extra- 0
Rate on Extra28.14%Rate on Extra21.89%Rate on Extra15.63%Rate on Extra7.82%Rate on ExtraNone
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000123,000119,000115,000110,000105,000
State/Federal Tax11,245State/Federal Tax15,317State/Federal Tax14,241State/Federal Tax13,165State/Federal Tax12,090State/Federal Tax11,245
Tax on Extra4,072Tax on Extra2,996Tax on Extra1,920Tax on Extra845Tax on Extra- 0
Rate on Extra20.36%Rate on Extra14.98%Rate on Extra9.60%Rate on Extra4%Rate on ExtraNone
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
Real Estate + Dep18,000Real Estate + Dep14,000Real Estate + Dep10,000Real Estate + Dep5,000Real Estate + Dep- 0
LT Capital GainsLT Capital GainsLT Capital GainsLT Capital GainsLT Capital Gains
- 0- 0- 0- 0- 0
125,000143,000139,000135,000130,000125,000
State/Federal Tax 15,452State/Federal Tax20,294State/Federal Tax19,218State/Federal Tax18,142State/Federal Tax16,797State/Federal Tax15,452
Tax on Extra4,842Tax on Extra3,766Tax on Extra2,690Tax on Extra1,345Tax on Extra- 0
Rate on Extra24.2%Rate on Extra18.8%Rate on Extra13.5%Rate on Extra6.7%Rate on ExtraNone
LTCG
Source of additional income: Long Term Cap Gain 100%Long Term Cap Gain 85%Long Term Cap Gain 50%Long Term Cap Gain 35%Long Term Cap Gain 20%
79k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000Pension24,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains17,000LT Capital Gains10,000LT Capital Gains7,000LT Capital Gains4,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
79,00099,00096,00089,00086,00083,000
State/Federal Tax3,197State/Federal Tax6,560State/Federal Tax6,055State/Federal Tax4,878State/Federal Tax4,374State/Federal Tax3,869
Tax on Extra3,363Tax on Extra2,858Tax on Extra1,681Tax on Extra1,177Tax on Extra672
Rate on Extra16.82%Rate on Extra14.29%Rate on Extra8.41%Rate on Extra5.89%Rate on Extra3.36%
105k Base
Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000Social Security45,000
Interest and Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000Interest & Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000Pension50,000
IRAIRAIRAIRAIRAIRA
LT Capital GainsLT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
Social SecuritySocial SecuritySocial SecuritySocial SecuritySocial SecuritySocial Security
105,000125,000125,000125,000125,000125,000
State/Federal Tax11,245State/Federal Tax13,610State/Federal Tax13,087State/Federal Tax11,865State/Federal Tax11,417State/Federal Tax11,343
Tax on Extra2,365Tax on Extra1,842Tax on Extra620Tax on Extra172Tax on Extra98
Rate on Extra11.83%Rate on Extra9.21%Rate on Extra3.10%Rate on Extra0.86%Rate on Extra0.49%
125k Base - SS Fully Taxed
Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000Social Security55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Qualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified DividendsQualified Dividends
Tax ExemptTax ExemptTax ExemptTax ExemptTax ExemptTax Exempt
Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000Pension60,000
IRAIRA- 0IRA- 0IRA- 0IRA- 0IRA- 0
LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000LT Capital Gains20,000
LT Capital Gains- 0- 0- 0- 0- 0
125,000145,000145,000145,000145,000145,000
State/Federal Tax 15,452State/Federal Tax18,942State/Federal Tax18,418State/Federal Tax17,197State/Federal Tax16,673State/Federal Tax16,150
Tax on Extra3,490Tax on Extra2,966Tax on Extra1,745Tax on Extra1,221Tax on Extra698
Rate on Extra17.5%Rate on Extra14.8%Rate on Extra8.7%Rate on Extra6.1%Rate on Extra3.5%
Consolidated 79 SF
79K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:45,000
Interest and Dividends10,000
Pension24,000
Total Income$ 79,000
SourceIncreased TaxTax Rate on additional income
1Investment Real Estate 100% Sheltered- 000.0%
2LTCG 20% Taxable6726723.4%
3LTCG 35% Taxable1,17711775.9%
4Social Security1,43614367.2%
5Investment Real Estate 75% Sheltered1,56315637.8%
6LTCG 50% Taxable1,68116818.4%
7LTCG 85% Taxable2,858285814.3%
8Tax Exempt Bonds2,873287314.4%
9Investment Real Estate 50% Sheltered3,126312615.6%
10LTCG 100% Taxable3,363336316.8%
11Qualified Dividends3,853385319.3%
12Investment Real Estate 30% Sheltered4,377437721.9%
13REIT with 20% QBD5,002500225.0%
14Investment Real Estate 10% Sheltered5,627562728.1%
15Qualified Distribution - Ordinary Income6,253625331.3%
Consolidated 105
105K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:45,000
Interest and Dividends10,000
Pension50,000
Total Income$105,000
SourceIncreased TaxTax Rate on additional income
1Investment Real Estate 100% Sheltered- 0- 00.0%
2Tax Exempt Bonds- 0- 00.0%
3LTCG 20% Taxable98980.5%
4LTCG 35% Taxable1721720.9%
5LTCG 50% Taxable6206203.1%
6Investment Real Estate 75% Sheltered8458454.2%
7Social Security1,6451,6458.2%
8LTCG 85% Taxable1,8421,8429.2%
9Investment Real Estate 50% Sheltered1,9201,9209.6%
10LTCG 100% Taxable2,3652,36511.8%
11Qualified Dividends2,8552,85514.3%
12Investment Real Estate 30% Sheltered2,9962,99615.0%
13REIT with 20% QBD3,5343,53417.7%
14Investment Real Estate 10% Sheltered4,0724,07220.4%
15Qualified Distribution - Ordinary Income4,6104,61023.1%
Consolidated 125 SF
125K Base Income - Add $20,000 from various income sources
Combined State and Federal Income Taxes
Income Sources
Social Security:55,000
Interest and Dividends10,000
Pension60,000
Total Income$ 125,000
SourceIncreased TaxTax Rate on Additional Income
1Investment Real Estate 100% Sheltered- 0- 00.0%
2Tax Exempt Bonds- 0- 00.0%
3LTCG 20% Taxable6986983.5%
4LTCG 35% Taxable1,2211,2216.1%
5Investment Real Estate 75% Sheltered1,3451,3456.7%
6LTCG 50% Taxable1,7451,7458.7%
7Investment Real Estate 50% Sheltered2,6902,69013.5%
8LTCG 85% Taxable2,9662,96614.8%
9LTCG 100% Taxable3,4903,49017.5%
10Social Security3,5583,55817.8%
11Investment Real Estate 30% Sheltered3,7663,76618.8%
12Qualified Dividends3,9803,98019.9%
13REIT with 20% QBD4,3044,30421.5%
14Investment Real Estate 10% Sheltered4,8424,84224.2%
15Qualified Distribution - Ordinary Income5,3805,38026.9%
cons 11x17
Income Tax by Source of Income - State and Federal Taxes
Assumptions: MFJ / 65+ Tax Year 2019 BNA income tax planner, v. 2019.1S
79K Base Income - Add $20,000 from various income sources105K Base Income - Add $20,000 from various income sources125K Base Income - Add $20,000 from various income sources
Income SourcesIncome SourcesIncome Sources
Social Security:45,000Social Security:45,000Social Security:55,000
Interest and Dividends10,000Interest and Dividends10,000Interest and Dividends10,000
Pension24,000Pension50,000Pension60,000
Total Income79,000Total Income$105,000Total Income125,000
SourceIncreased TaxTax Rate on additional incomeSourceIncreased TaxTax Rate on additional income SourceIncreased TaxTax Rate on Additional Income
1Inv Real Estate 100% Sheltered- 0- 00.0%1Inv Real Estate 100% Sheltered- 0- 00.0%1Inv Real Estate 100% Sheltered- 0- 00.0%
2LTCG 20% Taxable6726723.4%2Tax Exempt Bonds- 0- 00.0%2Tax Exempt Bonds- 0- 00.0%
3LTCG 35% Taxable1,1771,1775.9%3LTCG 20% Taxable98980.5%3LTCG 20% Taxable6986983.5%
4Soci
