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Retirement Planning

Tax provisions on retirement income

The IRS continues to add and change tax laws that could impact you in retirement. Find out which may affect you and how to plan for them.

Did you know that the IRS continues to adjust more than 50 tax provisions every year?1 With the constant flux of new rules and tax laws, it has never been more important to learn how certain tax liabilities can affect your retirement income.

Whether you're pre-retirement, still planning for retirement, or living in retirement, here are six tax provisions that you should know about when planning for your golden years.

  • The IRA rollover limit
    As of 2015, you will be limited to only one IRA rollover per calendar year, regardless of how many IRAs you own.2 With a rollover, you transfer money out of one Qualified retirement plan into another (such as a traditional IRA). The tax consequence for completing more than one rollover will result in your income being taxed, as well as a 10 percent penalty if you're under age 59½.
  • Social Security taxation
    How much Social Security taxation you can expect depends on your total income. The higher your income is, the more taxes you'll pay on your benefits. For example, if you and your spouse file a joint return with a combined income between $32,000 and $44,000, up to 50 percent of your benefits may be taxable. If your combined income is more than $44,000, you could be taxed as high as 85 percent.3
  • The state inheritance tax
    In 2018, the federal estate tax exemption (the amount of money you can pass onto to your heirs tax free) has increased to $10 million - double that for a married couple.4 However, depending on your state of residence, your estate may be subject to a state inheritance tax. This additional state tax means that your heirs may be forced to give up a sizable chunk of their inheritance when you pass away.
  • The personal exemption elimination
    As part of the 2018 tax reform, you will no longer be able to claim a personal exemption for yourself, your spouse, or any dependents. 
  • Standard deduction increase
    While deductions for personal exemptions have been suspended as of 2018, the Standard Deductions for all filers have increased.
  • The health insurance penalty
    You're probably aware that if you don't have health insurance you'll pay a penalty.  To see how the fee is calculated, visit





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