Is the 20% due to the funds being taken out of an IRA?
How would one get that 20% back?
MarQ
No, that’s the tax on withdrawing the money. The money in stock is tax sheltered....until I take it out. That’s when I have to pay the full taxes on it. I’m in a lower tax bracket than 20%. If I don’t remove enough to put me in a higher tax bracket, I overpay income tax on it, so I get part, or most, of it back. The only time I didn’t get it all back was when I withdrew $30,000 to buy my car. I got most of it back though at income tax time.
Our SS doesn’t add up to enough to put us in a higher tax bracket. If we have too much income, we pay tax on the SS.