Unfortunately, full retirement doesn’t end your income tax obligations. You’ll owe income taxes on withdrawals from a traditional IRA or 401(k) plan, and you’ll owe taxes on income outside your retirement plans (interest, dividends, capital gains, certain deferred income payments, etc.). Also, if your income exceeds a threshold amount, you could owe taxes on your social security benefits. So before the year ends, persons facing their first full year of retirement should look at their income and determine if an estimated tax payment is needed before the deadline or maybe some tax planning strategies are in order to manage the impact.
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Tags: retirement income
Written by: Doug Rodrigues