Page 6 of 8
The Stream
LIfestyle - cont'd
Con'd from p. 4By planning ahead, you can really avoid paying tax on your social
Security income. If Social Security benefit is you only income, then you
probably won’t have to pay any taxes on it at all. Even if you have more
income from your pension or IRA distribution, you still might not have to
pay tax on your Social Security income. Here is a look at how social
Security benefit is taxed: First, you need to figure out your “combined
income”. This is your adjusted gross income plus non-taxable interest
income plus half of your Social Security benefit.
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If this is under $25,000 for singles or $32,000 for couples filing
jointly, then your benefits are not taxable.
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If this is between $25,000-$34,000 for singles and $32,000-$44,000 for couples filing jointly, then you will have to pay
income tax on up to 50% of your benefit.
If this is over $34,000 for singles ($44,000 for couples), then you will have to pay income tax on up to 85% of your
benefit.
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It is true that you won’t ever have to pay income tax on 100% of you Social Security Income. But there are still steps you can
take to reduce taxes on your Social Security income. If you want to minimize tax, then you should try to keep your combined
income at around $25,000. For example, let us assume you received the average Social Security benefit of $15,000 in 2012. If
you withdraw $17,500 from you IRA, your real income would be $32,500 and your combined taxable income would be
$25,000. Once you take the standard deduction of $5,950 and the standard exemption of $3,800, then you will only have to
pay $778 in tax on income of $32,500 which is only a 2% effective tax rate. Diversify your retirement income. It is nice to pay
only 2% tax, but what if $32,500 is not enough to live on? This is why you need to diversify your retirement income. For
example, you can withdraw $5,000 from a Roth IRA and it won’t change any of the calculation above. You can also withdraw
from your savings accounts or CD’s, and you still won’t have to pay tax on this income either. Minimize your Expenses. The
easiest way to minimize combined income is to keep your expenses low after retirement. This is a major reason it is a good
idea to pay off your mortgage before you retire. A mortgage payment is the biggest monthly expense for many households. If
you can eliminate that big bill, then it will be much easier to live on $32,500 per year.
From Around the Diocese
Sunday School Teachers honored in Dallas
Mr. Alex Alexander and Mrs. Sheena Alexander were honored for the
husband and wife TEAM (Together Everyone Achieves More) both long
times dedicated Sunday School Teachers of St. Gregorios Orthodox
Church, Dallas of the American diocese during the Sunday School
Anniversary day on August 25th, 2013. Special recognition awards were
presented to the couples by H.G. Dr. Joseph Mar Dynasious,
Metropolitan of the Calcutta Diocese after the Holy Qurbana. The vicar
Rev. Fr. C. G. Thomas, Principal Sony Alexander and the Sunday School
Secretary Jithin Zachariah spoke during the occasion appreciating their
dedication and hard work. Mr. Alex Alexander is one of the pioneers
who started the Malankara Orthodox Church Sunday School organization in Dallas along with few others during 1978. Sheena
Alexander has been serving as a Sunday School teacher for the last 20 years and achieved many awards for perfect attendance
and academic accomplishments in the parish along with Alex
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