Taxes 101


Pensions and annuities are generally taxable when distributed.

You must start withdrawing from a traditional IRA by April 1 of the year following the year you reach age 70 1/2.

If one-half of your social security benefits plus your other income exceeds $32,000 for married filing jointly or $25,000 for all other filing statuses (except married filing separately and you lived with your spouse at any time during the year), a portion of your benefits may be taxable. For married filing separately and living with spouse at any time during the year, the base amount is $0.

If you are age 65 or over, and are below certain income limits, you may be eligible for the nonrefundable credit for the elderly or the disabled.

When receiving a pension, be sure to have taxes withheld, or you may need to make quarterly payments using Form 1040-ES, Estimated Tax for Individuals. That way, you will not owe too much tax at the end of the year and become subject to the penalty for underpayment of estimated tax.