Home Forums bugs: Can I Retire Yet? – Pro "Warning" bug, maybe?

This topic contains 1 reply, has 2 voices, and was last updated by  darrowk 10 months ago.

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  • #537

    tpsomerville
    Participant

    A while ago I started seeing a warning whenever I ran Reports. “Simulation generated WARNINGS: review Log report.”

    The log shows “WARNING: Net Investment Income Tax” in the year 2049 and every year thereafter (not too many more, as we’ll be in our 80s). But our AGI that year is only $101K (using today’s dollars), and we won’t have any investment income — just two RMDs, two pension payments and two Social Security payments.

    I don’t see anywhere in the log where the tax is actually paid, unless it’s just added into “federal tax:+$8,728.”

  • #538

    darrowk
    Participant

    Thanks for the report. Note the income thresholds for this tax are not indexed for inflation. That means you may be subject to this tax at relative modest income levels in later years of a simulation. The tax is included as part of your federal income tax in other taxes.

    Also, the IRS states that investment income includes, but is not limited to: interest, dividends, capital gains, and several other categories. Thus, even if you don’t own stocks/bonds, simply having some accumulated cash earning interest during later years of a simulation could subject you to this tax.

    There is more detailed information available from the IRS here: https://www.irs.gov/newsroom/net-investment-income-tax-faqs.

    We know there is a general need for even more detailed information in the Log report to understand situations like this. Thanks again for the feedback.

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