[Greg]

For those who have retired relying solely on stocks and bonds, how do you manage taxes?

I’m interested in understanding the strategies and approaches you use to minimize tax liabilities on your retirement income.

Any tips on handling capital gains, dividends, and required minimum distributions (RMDs) would be greatly appreciated.

Thank you

[Jairo]

Your broker or custodian that holds your stocks/bonds will issue you a tax form come January with the total dividends and interest earned.

Those will be taxed as ordinary income or as qualified dividends (similar to short or long term capital gain rates).

If you sell your stocks or bonds, they will be taxed as ordinary income if owned them for 12 months or less, or as long term capital gains (cheaper tax rate) if held for 12 months or more.

Ask your accountant or CPA

[Keith]

I use the tax planner in Quicken. It tracks capital gains, dividends, interest, Roth conversions, etc.

It tells me if I’m ahead or behind on taxes.

I then pay quarterly taxes to Fed and MN state.

It’s pretty accurate and so there’s no surprises at tax time.

[Nestor]

At the end of the year you will get a statement from your brokerage indicating what capital gains you need to declare.

For post-tax brokerage accounts, only the capital gains portion of your withdrawals are taxable.

[Chad]

Still will likely need to file if you earn more than the standard deduction or have withholding you want to get back.

[Kimberly]

Well, since I pay little (low tax bracket). I just pay once a year when I file.

[Scott]

I’m 50% rental income 50% stocks. From a tax perspective, I use turbo tax.

With regard to minimizing taxes, I make sure I sell dogs when I sell winners, I also usually sell lifo..

last in first out.

[Jairo]

Only way to handle taxes in retirement:
– pay them automatically with each distribution

– make estimated payments

– if held in a ROTH avoided entirely

Unless your under the income threshold, you have to pay one way or anothe

[Gehn]

All my income are long term capital gain or qualified dividends, so I can realize nearly $60k of profit without paying any tax on it (I live in a income tax free state).

If you are married, even more.

That’s more than enough to live an upper middle retirement life.

[Debbi]

See what’s due to the IRS after the first year and make any required quarterly payments after that.

[Author]

Posts