ImagiSOFT Simple Income Tax Calculator

Example 1: Mary

Mary, a 72-year-old retiree, uses a safe-income strategy from $500,000 in taxable interest accounts averaging 4%. Concerned about interest rate drops, she considers:

• $10,000 Pension income,
• $20,000 Interest income,
• $15,000 Social Security,
• Total: $45,000 ($13,325 Taxable Income. Social Security 50% taxable).

Tax: $1,351

With a 10-year split annuity shifting $20,000 CD interest:

• $10,000 Pension income,
• $6,591 Interest income,
• $22,080 Tax-free Return of Principal,
• $15,000 Social Security,
• Total: $53,671 ($0 Taxable Income. Social Security 0% taxable).

Tax: $0 | Benefit: $10,022 (Taxes down $1,351, income up $8,671).

Example 2: $5,084 Tax Savings

Jack and Susan, filing jointly, have:

• $60,000 IRA income,
• $40,000 Social Security,
• Total: $100,000 ($94,000 AGI, SS taxed at 85%).

Tax: $5,084

Shifting $40,000 to a Roth IRA:

• $20,000 IRA income,
• $40,000 Tax-free Roth IRA income,
• $40,000 Social Security,
• Total: $100,000 ($44,000 taxable, SS taxed at 10%).

Tax: $0

Note: Roth IRA withdrawals need a 5-year establishment period; plan ahead!