Penelope
Diamond Member
- Jul 15, 2014
- 60,265
- 15,790
- 2,210
- Thread starter
- #21
A majority of people receiving Social Security benefits pay income tax on some of those earnings. That's because, as of 1983, Social Security payments have been subject to taxation above certain income thresholds. With no inflation adjustment having been made to these benchmarks since 1983, they're now exceeded by most taxpayers who receive Social Security benefits and have other sources of income, too.
A number of strategies, both before and after you retire, can limit the amount of tax you pay on Social Security benefits. These include carefully planning when—and in what order—you withdraw money from tax-sheltered retirement accounts. Reducing your taxable income during the years in which you're drawing Social Security can have other benefits, too, such as lowering your Medicare premiums, which vary by income.
Individual Tax Rates
Benefits will be subject to tax if you file a federal tax return as an "individual" and your combined income from all sources is as follows:
Married Tax Rates
- Between $25,000 and $34,000: You may have to pay income tax on up to 50% of your benefits.
- More than $34,000: Up to 85% of your benefits may be taxable.
For couples who file a joint return, your benefits will be taxable if you and your spouse have a combined income that is as follows:
Avoid Paying Taxes on Social Security Income
- Between $32,000 and $44,000: You may have to pay income tax on up to 50% of your benefits.
- More than $44,000: Up to 85% of your benefits may be taxable.
----------------------------------------------
This is unreal, a forgotten tax if there ever was one. They should be raised up according to inflation. The rich can get their tax cut, but screw the seniors or disabled.
Actually, people should have individually owned retirement accounts for their SS contributions. SS is a ponzi scheme and the Feds have already spent all of the "Trust Fund".
Speak for yourself, most senior are dependent of SS and the disabled.