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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7252
Experience:  15years with H & R Block. Divisional leader, Instructor
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My wife and I will retire in about 3 years or so to the state

Resolved Question:

My wife and I will retire in about 3 years or so to the state of Arkansas.
We will have pensions and social security and some savings.
But, lets just consider the pensions and ss.
I'm assuming that some of the pensions(both government) and social security will be exempt but only up to a certain amount.
We will probably have only deductions for mortgage interest and property/personal taxes.
The mortage payment would be in the $600 range and taxes in the $100 range per month.

Pension and Social Security benefits would be as follows per month.
My pension - $2300
Her pensions-$1100
My ss -$1800
Her ss -$1600
Total -$6800

Can you tell me, base on current Arkansas Tax Law and current Federal Tax law, what our take home might be?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
In Arkansas,Social Security is exempt, as are VA benefits, Workers’ Compensation, Tier 1 and Tier 2 Railroad Retirement benefits, and unemployment compensation. Up to $6,000 in military, civil service, state/local government, and private pensions are exempt.
So you would receive all your SS plus your the first $6000 of your pensions (each) would be exempt from taxes in Arkansas. That would leave $28800 of income that would taxable to Arkansas.

Some of your SS would be taxable to Federal (based on today's calculations) that would mean that your total pensions ($48800) plus $27420 of your SS payments would be taxable income.

Robin D :

Good morning

Robin D :

The system shows that you are IN CHAT

Customer:

Okay, thank you.

Robin D :

You are most welcome

Robin D :

Your positive rating of the assistance is thanks enough.

Customer:

Thank you for your response.

Customer:

Thank you for your response. Now, I have, under todays tax laws, $28,800 is taxable in Arkansas and $76,220 by the Federal government. What is my take home?

Robin D :

Neither generally withhold unless you request. Are you asking me what your tax liability would be then on the taxable income?

Robin D :

The tax liability in Arkansas would be estimated at $1780
The federal tax liability would be estimated at $8000

Robin D :

Please remember these amounts are very crude estimates because 3 years in the future is too far to estimate a tax liability for federal or state.

Customer:

I recognize this is just an estimate and appreciate your response. Who knows what will happen in the next 3 years.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7252
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 11 other Tax Specialists are ready to help you

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