stuwoolf

Thanks.

I understand the Agencies you mentioned are all managed by SPPA (Scottish Public Pension Agency)

stuwoolf

Thanks for this. I did not know.

It really does put the "Cat amongst the Pigeons" Do you know the current rate of tax? Does US have a "Tax Allowance" system, whereby the first X amount of earnings is tax free?

Thank you.

stuwoolf

Thinking more on this, I now reside in Florida which does not have State Income Taxes, only Federal Income Tax. I presume it will be the Fed element of taxation which will apply.

tht

Effectively yes the same standard deduction as you have (half if filing single).

“In 2021 the standard deduction is $12,550 for singles filers and married filing separately, $25,100 for joint filers and $18,800 for head of household.” But when you add on the significant cost of health insurance it will be a lot higher.

https://www.nerdwallet.com/article/t...dard-deduction

https://www.irs.gov/newsroom/irs-pro...-tax-year-2021

stuwoolf

Thanks for this.

Could you clarify what is meant by "standard deduction" is that the point where taxation begins on income above that figure?

Grateful for your continuing assistance.🙂

tht

you have 2 options:
- standard
- itemized

Before the changes to the SALT rules (not as relevant in FL anyway) I would already be itemized and my deduction was many times bigger than the “standard” because I had NY state city and property taxes to deduct in addition to mortgage interest and charity donations. Now with many of them gone for now I have used the standard a few times. You don’t really need to think about it, you put all your details in to the tax software and it tells you what’s best. If you are close to itemized there are strategies where you try alternate between standard and itemized. e.g. no donations to charity one year and then double the next, or if you have significant medical expenses you can plan the timing of you put them all in to one year.

To compare it to the UK, basically the standard deduction works out to be similar to the tax free allowance, although I think in the UK that now does not apply over a GBP125k or somthing close to that. In that if your earn below it you won’t pay federal income tax.

lansbury

For 2021 the standard deduction is $12,550 for single taxpayers. $12,550 for married taxpayers filing separately. $18,800 for heads of households. $25,100 for married taxpayers filing jointly. If you are over 65 the amounts are about $1300 higher. If you have a high amount of deductions, you can opt to itemize them giving you possibly higher deduction sums.

Effectively the above means if you file married filing jointly the first $25,100 of income is free of tax.

durham_lad

…and that is taxable income, right? If you pay into a pension scheme or a health savings account that money goes in before tax so your actual income could well be much higher than your taxable income.

stuwoolf

Thanks🙂

stuwoolf

Thank you to all who have given me guidance.

Much appreciated🙂