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Despite the actual tax rate reductions of the Jobs and Growth Tax Relief Reconciliation Act of 2003, leading marginal tax bracket for many retirees is a whopping fouthy-six.3%. Why? Because Social Security benefits are subject to income financial. Those affected are Social Security recipients who include the good fortune (misfortune?) end up being subject to both the 25% tax bracket and the 85% inclusion rate for Social Security benefits.

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If you claim 5 personal exemptions, your taxable income is reduced another $15 thousand to $23,500. Your income tax bill is destined to be approximately 3,000 dollars.

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