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Publication 721 Tax Guide to U S Civil Service Retirement Benefits  Form

Publication 721 Tax Guide to U S Civil Service Retirement Benefits Form

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in today's video we're going to dive in depth into one of retirement's most common tax obstacles the reason this obstacle is so common is because everyone taking Social Security will face this as a potential hurdle now we're going to explain how this obstacle Works how it transforms your tax brackets in retirement and then hopefully show some strategies to help avoid these higher taxes now first there's a basic concept that everyone watching this video needs to understand so we can start building on from here and that concept is something called a marginal tax rate now marginal tax rate is the tax rate that you pay on a specific dollar of income for instance let's say you are someone on the edge of the 22 tax bracket you add an extra thousand dollars more of income through an IRA withdrawal and that moves you into the 24 bracket now just that extra thousand dollars is being taxed at 24 all of the dollars before that are being taxed at 22

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