Retirement & Impact on Your Income Taxes

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 contributed to an IRA or an employer-sponsored retirement plan in 2014, you may be eligible for a credit. This nonrefundable credit is based on the adjusted gross income and can be up to $1,000 per taxpayer. It can be taken in addition to the deduction of the traditional IRA contribution.