![]() In the meantime, everyone, please stay safe and stay on track and take care. But you can reach out to me, free meeting, we'll talk about some tax planning issues or retirement planning, that type of thing. I like to understand about it, but I don't do preparation. If you have some issues you want to talk about. I'm sure a lot of people are enjoying them, finding them helpful. It's important to understand what all this stuff means. ![]() But as you get your taxes done, I don't know if you do them yourself or Turbo Tax or if you have a CPA, everybody's throwing around these numbers and things like that. It's just kind of in the weeds, little minutia stuff. It's the greatest deal going.Īll right, so I hope that was helpful. Just confirm that it's in there for you people on Medicare, and you better be on Medicare at 65 and older. So, if you don't see it on one form, make sure you have it on the other. But sometimes, it's interesting, sometimes it's not on this form, it will be on the 1099-R and it will be in box 10. On your RRB 1099, your box 11, your Medicare, that will show you how much has been taken out of your railroad retirement annuity for Medicare. So, that's box threeĪnd then one other thing for you retirees 65 and up, those on Medicare, other thing I like to note on both forms. You're investing in your annuity, your railroad retirement annuity. But, that's basically your tier two investment. So, I just like to bring that up because sometimes you see these boxes and you don't know what they mean. So, you see that? IRS treats that, it's not as a payment, it's actually they consider it an investment in there. Then a couple things I like just to highlight, also, is on form RRB 1099-R, just box three, employee contributions. And because your SSEB, social security equivalent benefit doesn't kick in until 62, so I thought that was interesting. Now, what's interesting, especially for you new retirees, the Golden Ticket people, as I like to call them, the 60 and 30 people, right? From 60 to 62, even though you're collecting early retirement, all that gets taxed as a pension. It's income to you, so that's a different taxation rate. Then on your second part, the tier two gets taxed as a pension. I have it on YouTube, and that will walk you through the rates and how all that's calculated, right? Now, your tier one gets taxed, right? That's why it's social security equivalent because it didn't get taxed as a social security benefit, right? And to understand that taxation formula, you can go check out my previous videos, Taxes on Your Railroad Retirement Annuity. The other form's going to be form Railroad Retirement Board 1099-R, and that's going to represent your tier two portion of your railroad retirement annuity. On your tier one, you're going to get a form, RRB, Railroad Retirement Board, obviously, 1099. So, even though you were getting one monthly benefit on your retirement, you're going to get two forms, right? And each form's going to represent the tier one and tier two. Now, it comes that January's coming along, right? You're now going to receive forms from the Railroad Retirement Board, or the IRS actually, and they're going to want to get the taxes on that. So, tier one, tier two, right? Those two numbers making up your monthly railroad retirement annuity number. And then your tier two, which would be cleverly named your non-social security equivalent benefit. First one is your tier one benefit, okay? Actually, it's referenced as a social security equivalent benefit payment. But inside that check, there's two numbers that are generating that monthly check that you're getting, that amount. Every month, as one check comes from the Railroad Retirement Board. So, if you're a retiree currently, you're getting one monthly payment right now. It's not a must-know subject, but it's a nice to know subject to understand how things are getting taxed on your railroad retired annuity. It's more about the process of taxation on your railroad retirement annuity. It's not really a conversation about rates. Today, we're going to talk about your railroad retirement, your annuity, and the federal income taxes associated with it. My name is John McNamara with Highball Advisors. Welcome everyone to the Railroad Retirement Whiteboard.
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