Wait to Retire?

I am wondering if anyone thought about the fact that when you retire in PA you no longer have to pay PA income tax or local income tax. this can add up to about 4%. On a signing bonus of $100,000 that is $4000. I am two years from retirement and if made an offer on my 140 acres might consider waiting. Any thoughts on this?  

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Permalink Reply by craig on October 29, 2010 at 3:47am
I don't believe you are correct in stating that once you retire you don't have to pay income tax.....the reason being that no matter if you are retired or not, signing bonus' and royalties are considered ordinary earned income which is taxable as income. I'm not an accountant, but that is what I understand it to be.
Permalink Reply by paleface on October 30, 2010 at 12:04am
Signing bonus is unearned income,you pay federal and state taxs no payrole taxs.
Permalink Reply by craig on October 30, 2010 at 3:14am
And royalties would be taxed as earned income then?
Permalink Reply by Elnathan Cory on October 29, 2010 at 6:50am
What if you retire to Florida and claim that to be your residense. They have no income tax.
Permalink Reply by Frank Walker on October 29, 2010 at 12:44pm
Do not wait for the reason you stated. There is PIT and local tax on your bonus money.

You might have been confused because there is no PIT on pension receipts. As you already are aware though, leasing bonus money is not pension money.

[Note: PIT = Pennsylvania Income Tax]
Permalink Reply by Elnathan Cory on November 1, 2010 at 12:24am
Yes, I understand that we have already payed income taxes in PA on our pension and have payed taxes to our local government (in my case a twp). I guess there is no way out of taxes as long as they exist. Does anyone in PA have an idea what taxes would be on the bonus per $1000 roughly?
Permalink Reply by Michael E. Ondesko on November 1, 2010 at 12:39am
You would pay 3.07% of the income to the state there would be no local tax at least in my twp. it is not earned.per say
Permalink Reply by Elnathan Cory on November 1, 2010 at 3:03am
Thanks!
Permalink Reply by PI on November 1, 2010 at 3:32am
so we pay 3.07% to state, and then it will add to our tax bracket for federal. Are there any other taxes that we are obligated to pay? Social Security? Unemployment?

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