Tax planning during retirement is a lot different from an individual who has to prepare to file with a full-time job and a family to factor into account. One common misconception people have about taxes during retirement is that they will not have to worry about it until many years into the future. It is a good strategy for people to start preparing for retirement finances with help from professional tax planning. New Port Richey residents would not want to put themselves in a situation where they run out of saved capital in order to last them their whole time while in retirement.

Understanding How Retirement Taxes Work

Understanding how taxes are calculated for an individual during retirement goes a long way in potentially having someone pay less taxes with the appropriate tax planning. New Port Richey residents should be made aware that one of the biggest factors overlooked in retirement for taxes is the way that social security benefits are taxed. Most people do not consider looking at the stipulations for income in retirement because it is always many years away, but the best source of information pertaining to an individual retirement circumstance would be a trusted CPA.

Opportunities that Make People Pay Less

In order to be able to pay less for taxes during a person’s retirement, there are some steps that someone and their spouse can take with the help of a professional CPA’s tax planning. New Port Richey residents who have some type of savings that they want to save as much as possible should move them into tax-deferred retirement accounts. For example, two of the more popular forms of these accounts are a 401k plan or IRA, and even a trust or brokerage account. A person getting ready for retirement would also be doing themselves a favor by having years when itemized deductions may vary, such as taking on a new mortgage.

*Disclaimer: The views expressed here are those of the authors and do not necessarily represent or reflect the views of Suncoast CPA Group*