How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12214
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

Today I will be signing up to begin receiving my pension/annuity

Resolved Question:

Today I will be signing up to begin receiving my pension/annuity from Siemens. I am 61 and still work full time at anther company. I have the option to have the monthly payment ($930) taxed or not. If you agree, I'm leaning toward them taxing it? At tax time will my pension benefit also be added to my income and be taxed again?
Submitted: 11 months ago.
Category: Tax
Expert:  Megan C replied 11 months ago.

Customer:

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Customer:

When you say that you are going to have your pension benefit "taxed" essentially all they are doing is withholding your tax now, so that at the end of the year when you go to do your taxes you don't have to pay a bunch in to the IRS

Customer:

I think it's wise to have at least 15% withheld for taxes. This will ensure that you do not owe tax at the end of the year

Customer:

You will only be taxed once on the money - you are not taxed twice.

Customer :

Will I need to add the pension to my income which could possibly put me into a higher tax bracket?

Customer:

Yes, your pension is taxable.

Customer :

Yes, I know it's taxable but if I pay the 15% like you suggest I don't want to also have my other income taxed at a higher rate but I think your answer is saying it could? My federal tax bracket is 25% - should I have the pension taxed at 25% rather than 15%?

Customer:

If your federal tax bracket is 25% then that is the amount you will need to have withheld. I was under the impression that the $930 per month was your only source of income

Customer :

Do pensions also get taxed by the state? My Calif state tax bracket is 9.3%. Should I have them tax it at 35% to include both?

Customer:

Typically a company does not withhold state taxes, you would have to make that savings separately. Whatever you have withheld is going to the IRS, not the state

Customer :

Last question.........If I take the pension now it will be $930 per mo. but if I wait until age 65 (4 yrs) it would be $1130. I don't need the money now but everything I read online leads me to believe taking it now would be the better choice. As it relates to tax, do you agree with now rather than waiting until I actually retire?

Customer:

From a tax perspective, I would take the pension benefit now, rather than later. I think you would come out ahead financially in the long haul

Customer :

Excellent - thanks for your assistance.

Customer:

Thanks for your question. If you would, please take a moment to rate my response as "excellent" using the rating feature at the bottom of your screen

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12214
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Megan C and 4 other Tax Specialists are ready to help you
Expert:  Megan C replied 11 months ago.
Thanks, XXXXX XXXXX your question. Please come back and visit me for any question you may have. I can do tax, finance, and social security questions. It was a pleasure working with you today.
Customer: replied 11 months ago.

I just rec'd an email saying I could ask you a follow up question and I have one! After we communicated a friend of mine told me to contact the IRS to be sure about what amount of tax that should be taken out. I called the IRS and made sure he knew I still work full time and my tax current income tax bracket is 25%. The IRS Rep I spoke with told me to have 9% withheld, not the 15 or 25% you advised. Now I'm more confused then before I contacted you. What's your input?

Expert:  Megan C replied 11 months ago.

.

Expert:  Megan C replied 11 months ago.
I would have the 25% withheld. This will ensure that you have the proper amount of taxes withheld and you do not owe come tax time.

Thanks again for using JustAnswer.com and please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.