Taxes in retirement.

Many clients of Golinski Tax Prep, LLC in Spring Hill are retired. Their federal returns often include Social Security benefits, pension or annuity payments, and distributions from IRAs or workplace plans. This page restates how the IRS describes those items. It is general information, not a determination of anyone’s tax.

How Social Security is taxed

Social Security retirement, survivor, and disability benefits can be partly taxable. Supplemental Security Income (SSI) is not taxable. The Social Security Administration reports the net benefits you received on Form SSA-1099. On Form 1040 or 1040-SR you enter the total on line 6a and the taxable portion on line 6b.

The IRS compares a combined figure — one-half of your benefits plus all other income, including tax-exempt interest — with a base amount for your filing status. Those base amounts are $25,000 if you are single, head of household, or a qualifying surviving spouse; $32,000 if you are married filing jointly; $25,000 if you are married filing separately and lived apart from your spouse all year; and $0 if you are married filing separately and lived with your spouse at any time during the year. If the combined figure is above the base amount, part of the benefits may be taxable. Generally up to 50% of benefits can be included in income; up to 85% can be included if the combined figure is above a higher threshold ($34,000, or $44,000 if married filing jointly), or if you are married filing separately and lived with your spouse. See IRS Topic no. 423, the Social Security income FAQs, and Publication 915.

You can ask the Social Security Administration to withhold federal income tax from your benefits by submitting Form W-4V. Withholding is optional; some people use estimated tax payments instead.

Pensions and IRA withdrawals

Payers report pension, annuity, IRA, and similar distributions on Form 1099-R. Most payments from a traditional pension or a traditional IRA are taxable as ordinary income. If you made after-tax contributions, part of a payment may be nontaxable. The taxable amount, any federal tax withheld, and a distribution code appear on the 1099-R. You report these amounts on Form 1040 or 1040-SR. See IRS Topic no. 412 (pensions and annuities), Topic no. 451 (IRAs), and Publication 590-B.

Qualified distributions from a Roth IRA are generally not taxable. The rules for what is qualified, and for conversions or early distributions, are in Publication 590-B. Form W-4P is the IRS form used to choose federal withholding from a pension or IRA payment.

Required minimum distributions

You generally cannot leave money in a traditional IRA, SEP IRA, SIMPLE IRA, or most workplace retirement plans indefinitely. The IRS requires minimum withdrawals — required minimum distributions, or RMDs — once you reach the applicable age. The IRS currently describes that age as 73 for most account owners. The first RMD from an IRA is due by April 1 of the year after you reach that age. Later RMDs are due by December 31 each year. Taking the first withdrawal in the following January through April 1 means two distributions can fall in the same tax year. See the IRS page on retirement-plan RMDs.

The amount for a year is based on the prior December 31 account balance and an IRS life-expectancy table. The distribution is reported on Form 1099-R and included on your federal return using the same rules as other IRA or plan withdrawals. Roth IRAs do not require lifetime RMDs for the original owner. Missing an RMD can result in an excise tax; the IRS explains how that tax is reported on Form 5329.

Florida has no state income tax

Florida does not tax personal income. That means there is no Florida individual income tax return for Social Security, pensions, or IRA withdrawals. Federal income tax still applies under the IRS rules above. If you moved to Florida during the year, or you still have income or a home in another state, that other state may still require a part-year or nonresident return. Those filings are described on our Out-of-State and Multi-State Returns page.

We prepare individual tax returns that include retirement income, and we are in the office year-round for questions that come up after you file.

Call or send a message

To talk through this year’s return, call (352) 419-4633 or use the contact form. There is no online booking. Appointments are Monday–Thursday 9:00 AM–5:00 PM and Friday 9:00 AM–4:00 PM.