What income taxes do I pay after I retire?

The amount of income tax you pay after you retire will depend on the sources of your income and the amount of your income. Some sources of income that you may receive in retirement, such as Social Security benefits, may be subject to federal income tax, while others, such as qualified distributions from a traditional individual retirement account (IRA) or 401(k) plan, may not be.

Here are some common sources of income that you may receive in retirement and the tax treatment of each:

• Social Security benefits: A portion of your Social Security benefits may be subject to federal income tax, depending on your total income and filing status. The amount of your benefits that is subject to tax depends on your combined income, which is your adjusted gross income plus one-half of your Social Security benefits plus any tax-exempt interest you receive.
• Pension and annuity income: Pension and annuity income may be partially or fully taxable, depending on whether the pension or annuity is qualified or non-qualified and on the amount of your other income. You will receive a Form 1099-R showing the amount of pension or annuity income you received during the year, and you will need to include this amount on your tax return.
• Distributions from retirement accounts: Qualified distributions from a traditional IRA or 401(k) plan are generally taxable as ordinary income. However, if you made any nondeductible contributions to your traditional IRA, a portion of your distribution may be tax-free. Distributions from a Roth IRA are generally tax-free if you meet certain requirements.

It’s a good idea to consult with a tax professional or refer to IRS Publication 575, “Pensions and Annuities,” and IRS Publication 590-B, “Distributions from Individual Retirement Arrangements (IRAs),” for more information on the tax treatment of different types of retirement income.

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