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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4341
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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How much % should I deduct for Federal tax from my monthly

Resolved Question:

How much % should I deduct for Federal tax from my monthly Annuity of $2500?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi,

NPVAdvisor :

The answer (the best answer) to your question really depends on two things: (1) the rest of your tax situation.

NPVAdvisor :

like how much other money you already have coming in ... if your other income puts you in the, say, 15% tax bracket, and this amount of money would also all fall into the 15% bracket (not take you into a HIGHER bracket, in other words) ... the a 15% withholding SHOULD do it

NPVAdvisor :

However there's one more thing ... is this the annuitization of an after tax annuity, where only some of the income is taxable ... or is this from, say, a pension or IRA where the total 2500 is taxable income?

NPVAdvisor :

Sorry, I just saw the second statement about the W4-P, so I'm guessing this IS a pension?

Customer:

This is from a Retirement Annuity were nothing was taxed. I will also receive income of approx. $50M this year. Normally my wife and I file jointly and fall within the 14% bracket I think.

NPVAdvisor :

OK, great, married fling jointly, standard deduction (rather than itemizing), and no dependents? (and that 2500 is on top of the 50,000?

Customer:

Married, filing jointly & itemizing with dependent. yes 2500 is on top of 50,000

NPVAdvisor :

can you ballpark your itemized deducions? (Or we can simple assume the standard deduction)

Customer:

assume the standard

NPVAdvisor :

ok just a sec

NPVAdvisor :

First here are the brackets

NPVAdvisor :

  • 10% on taxable income from $0 to $17,850, plus

  • 15% on taxable income over $17,850 to $72,500, plus

  • 25% on taxable income over $72,500 to $146,400, plus

  • 28% on taxable income over $146,400 to $223,050, plus

  • 33% on taxable income over $223,050 to $398,350, plus

  • 35% on taxable income over $398,350 to $450,000, plus

  • 39.6% on taxable income over $450,000.

NPVAdvisor :

And here's a quick projection, using 80,000 (your 50 + 2500/mo)

NPVAdvisor :























































Gross income$80,000
Qualified plan contributions-$0
Adjusted gross income=$80,000
Standard/Itemized deductions-$12,200
Personal exemptions-$7,800
Taxable income=$60,000
Tax liability before credits$8,108
Child tax credits-$0
Estimated tax liability=$8,108
Taxes withheld-$0
Tax shortfall=$8,108
NPVAdvisor :

THis assumes, the standard and no withholding

NPVAdvisor :

SO

NPVAdvisor :

your taxable income is at 60, that puts you squarely in the 15% bracket

NPVAdvisor :

and the additional 2500/month is all in that bracket

NPVAdvisor :

15%

Customer:

great news, I was thinking 10% but will go with your 15%. Thanks

NPVAdvisor :

That should be very safe, given that you itemize

Customer:

thanks

NPVAdvisor :

Your positive rating is thanks enough

NPVAdvisor :

Let me know if I can help further!

NPVAdvisor :

Lanew

Customer:

I will use the same for State

NPVAdvisor :

That MIGHT be a little high Wgat state?

NPVAdvisor :

OIC NY hang on one sec

Customer:

New York

NPVAdvisor :

ok just one more second here

NPVAdvisor :

64,000
64,050
64,100
64,150
64,200
64,250
64,300
64,350
64,400
64,450
64,500
64,550
64,600
64,650
64,700
64,750
64,800
64,850
64,900
64,950
64,050
64,100
64,150
64,200
64,250
64,300
64,350
64,400
64,450
64,500
64,550
64,600
64,650
64,700
64,750
64,800
64,850
64,900
64,950
65,000
Your New York State tax is:
3,813
3,816
3,819
3,822
3,826
3,829
3,832
3,835
3,838
3,842
3,845
3,848
3,851
3,855
3,858
3,861
3,864
3,867
3,871
3,874
3,496
3,499
3,502
3,505
3,509
3,512
3,515
3,518
3,521
3,525
3,528
3,531
3,534
3,538
3,541
3,544
3,547
3,550
3,554
3,557
3,655
3,658
3,661
3,664
3,668
3,671
3,674
3,677
3,680
3,684
3,687
3,690
3,693
3,697
3,700
3,703
3,706
3,709
3,713
3,716

NPVAdvisor :

Woops that formatting didn't stick ... I was trying top paste in the number from the NY handbook

NPVAdvisor :

BooXXXXX XXXXXne ...

NPVAdvisor :


YOur NY tax for married filing jointly is 3557 on a NY taxable income of 65000






NPVAdvisor :

That

NPVAdvisor :

s 5%

Customer:

awesome!!!

Customer:

Thank you very much

NPVAdvisor :

You're welcome

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4341
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 9 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.

Thanks so much, Marcelino!


If you'd like to work with ME again just say "For Lane only," at the beginning of your next question.


Thanks again,
Lane

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Lane
Lane
Tax Professional
4341 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986