California Income Taxes Fix ???

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JSenecal
Posts: 3
Joined: Sat Oct 24, 2020 1:02 pm

California Income Taxes Fix ???

Post by JSenecal »

My Federal Income Tax Rate is 24% and my California Income Tax Rate is 9.3%. So I have my tax rate listed as 33.3% to accommodate both.

I am trying to resolve the issue of California not taxing Social Security.

My solution to this is: 85% of my Social Security is taxable. I added back in Miscellaneous Income the amount of money that really wouldn't be taxed.

For example: SS annual benefit $44,496, at 85% $37,821.60 is taxable, at my California income tax rate of 9.3% I added back in $3,517.40 as Miscellaneous Income with Cola Tracking Inflation.

When I hit run I get a 95% Probability of Success, without this adjustment I get an 83% Probability of Success (due to SS being taxed in California).

Looking for opinions to determine if this tweak is realistic.

Thanks.
jimr
Posts: 751
Joined: Thu Feb 28, 2008 6:48 pm

Re: California Income Taxes Fix ???

Post by jimr »

That sounds about right, but the devil's in the details of course. Based on nothing really, I'm a bit surprised by the difference in your probability success between the two approaches. I wouldn't have expected that much impact, although it's entirely dependent on what else is going on in the plan.
JSenecal
Posts: 3
Joined: Sat Oct 24, 2020 1:02 pm

Re: California Income Taxes Fix ???

Post by JSenecal »

Thanks for your input...much appreciation.
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