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Veteran Services: Finance Questions

Finances

You're working, and you've got a family that depends on you - both now and down the road. Where do you invest your money? Do you borrow against the equity in your house? Through a preferred provider relationship with USAA, The American Legion can provide expert financial advice to just about any question.

Questions & Answers

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Financial Questions & Answers

Question:

My wife and I are retired. I received military retention pay and both of us receive Social Security benefits monthly. I returned to work in 2011 and received taxable wages of about $80,000. Will I/we be taxed on the working wage if we file combined and if so, what would be an estimated percentage? -Steve

Answer:

e’ll start by trying to put a positive spin on things. In 2012, federal income taxes will be no higher than 35 percent of your taxable income. That’s your adjusted gross income less deductions and exemptions. In your situation, your adjusted gross income would include your military retirement, 85 percent of your Social Security, and your wages plus any interest, dividends, capital gains or other income. Since you didn’t provide us with any of the pertinent numbers except your wages, it’s impossible to estimate your taxes. Our guess is that your marginal tax bracket will probably be 25 percent (that is the tax rate on the last dollar you earned) and your average rate significantly less than that. The best way to get a handle on it is just to plug the numbers into the forms (or software). Good luck!