Josh Scandlen Podcast

If you are a married filing jointly (MFJ) taxpayer you will not be one indefinitely.  At some point, you or your spouse will be a single taxpayer and your tax situation will change dramatically.    Let’s go back to John and Judy. Their income is $100,000 which consists of John’s military pension and IRA distributions.   Now, let’s say John dies. Thankfully, he filed for a 55% Survivor Benefit Pension (SBP) when he separated from the military which allows Judy to receive a pension benefit of $30,250.  However, that’s not enough for Judy to live on.  She feels she needs a gross income of $75,000 to maintain her lifestyle.  So, the rest of her income will come from IRA distributions.  (In case you are wondering about Social Security, we’ll get into that later.  That’s where it really gets fun!) Anything jump out at you?   Judy has 33% less income yet pays 13% more in federal tax! How can this be?   On the next page you will see the tax tables for a single t