Increasing Income Is Bigger Concern Than Paying Taxes

Posted: Jun 29, 2017 12:01 AM
Increasing Income Is Bigger Concern Than Paying Taxes

DEAR BRUCE: What would the new tax reform mean for me? I am a single father and make $35,000 a year. Does this mean it would change how much money I get back when I file my taxes? And if so, would I get more back or less? -- Ben

DEAR BEN: The reality is, given your income, I don't think there would be much change when it comes to how much refund you'll claim on your taxes. You may receive a little bit more and conceivably a little bit less. I wouldn't count on any major differences.

I would rather be looking for a way to earn more money. Your income of $35,000 a year makes me believe that you are just going from paycheck to paycheck. If that means considering a new career path, then that is the way to go. Good luck!

DEAR BRUCE: I plan to work past my 70th birthday. Will I need to draw money out of my IRA? My question is, am I required to do so, and if so, what is the lowest percent? -- J.T.

DEAR J.T.: The first part of your question is clear. You're required to make a withdrawal after you turn 70 1/2. No question about that. You can reinvest it if you chose, but you MUST make the withdrawal.

Unfortunately, I can't give you an answer as to how much money you will have to withdraw. That has to be determined on an individual basis, and it depends on your theoretical "death date." In other words, the idea is for you to withdraw enough money out of your IRA so that when your money runs out, so do you. That's the theory anyway.

(Send questions to Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.)