United States Taxes and the Pensions for Me and My Wife
I’m drawing a monthly pension as a military retiree and that’s the only income Josie (my wife) and I get while we’re living in the Philippines. Okay, so I get a little (very little) from the ads you see on this website. It’s not enough to affect my total income for tax purposes.
All of this will change in 2022 and 2023 when we both start drawing social security pensions.
We Probably Still won’t have to Pay Taxes
I say “probably” because things can change dramatically from year to year. As it stands now, we won’t have to pay taxes on any of it. If I add all three pensions together, adjusted for inflation and COLA increases, we still won’t make enough to pay taxes on it. That’s really sad, if you think about it – not making enough money to pay taxes on it.
Up until today, I worried the social security pensions would put us over the top. I had never bothered to find out exactly what the ramifications would be.
Research is a Wonderful Thing
Like many people, I had assumed that our social security benefits would be completely taxable when added with another taxable income source. Well, I had assumed wrong.
When I filled out the forms, the results surprised me and relieved me at the same time. I hated filing taxes in past years even when I expected a return, which was more often than not. I don’t ever want to file again, even if I can expect a return in the future.
The exact amount our social security pensions will add up to is a mystery. We won’t know until we apply for them. I used a higher than expected number while doing calculations and I seriously doubt we’ll get even close to it.