Looking ahead to retiring from a railroad employer, wife and I will have a railroad retirement annuity of about $41000/year and dividend & interest of about $30,000/year. Would appreciate a ball park estimate of what our federal tax burden is liable to be. We don't itemize, generally take the standard deduction.
Well, I think you may want to contact your benefits dept to explain the annuity pay out. From
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it appears that some is treated just like Social Security, and some as a private pension. As a couple, you will have $6,800 in 2 exemptions and a Standard deduction of $10,700, so $17,500 that is not taxed. Depending on how the annuity is split, there may be little to no tax there. Say it's 50/50. If $21K is taxable, and offset by that $17k, that's $4,000 taxed at 10%, or $400. The dividend and interest is taxed at 5% then.Your total tax bill will be about $2000. See
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for the tax rates, and link above for my source on your annuity.You have any IRA money? At 10%, you may want to convert to a Roth a bit at a time to stay in the 10% bracket. JOE
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