Are Social Security benefits taxable? Understanding the impact of Social Security Taxes in Retirement.
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Social Security benefits are a source of income for many retired Americans, but did you know that these benefits are taxed? For those who are not aware, Social Security benefits are subject to federal income tax. In fact, up to 85% of your Social Security benefit could be taxed. Here is what you need to know about how your Social Security benefits are taxed.
Who is taxed?
Not everyone who receives Social Security benefits is subject to federal income tax. The amount you pay in taxes depends on your total income for the year. Your income includes more than just your Social Security benefits. It also includes any other income you receive, such as wages, interest, and dividends. If your total income exceeds a certain threshold, then your Social Security benefits will be subject to taxation.
How is the tax calculated?
The amount of tax you owe on your Social Security benefits depends on your total income for the year, as well as your tax filing status. If you file as an individual and your total income is between $25,000 and $34,000, then 50% of your Social Security benefits will be taxed. If your income exceeds $34,000, then up to 85% of your benefits could be taxed. For those who file a joint tax return, the threshold is $32,000 and $44,000, respectively.
How can you reduce your taxes?
There are a few ways to reduce the amount of taxes you owe on your Social Security benefits. One option is to reduce your taxable income by taking advantage of deductions and credits. For example, you can deduct certain medical expenses, such as those related to long-term care, from your taxable income. You can also contribute to tax-advantaged retirement accounts, such as an individual retirement account (IRA) or a 401(k). Doing so will not only reduce your taxable income in the current year but will also help you save for retirement.
Another way to reduce your taxes is to delay taking Social Security benefits. If you delay taking benefits until after your full retirement age, then your benefits will increase by 8% for every year you delay. By waiting to take benefits, you will have a higher income in retirement, which could help you avoid having your benefits taxed.
In conclusion, Social Security benefits are a valuable source of income for many people, but they are subject to federal income tax. Understanding how your benefits are taxed can help you plan your retirement income and reduce your tax burden. By taking advantage of deductions and credits, contributing to tax-advantaged retirement accounts, and delaying taking benefits, you can minimize the amount of tax you owe on your Social Security benefits.
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yes, SS is taxed, thanx to that actor who thot he can play president reagan. he made the poor of this nation poorer…
Thanks for the video. Do you know if the (non-taxable) VA disability benefits are included as part of the provisional income? Thanks
What bucket does a Pension Plan go into? I would guess Tax Free.
It is criminal that Soc Sec is taxed.
This is our country, where ordinary people who work hard all their lives, 50 years or more, get punished for that hard work by being heavily taxed in the years when they can afford it least. Shameful! Now a question. I have heard that if you covert money from an annuity to a Roth IRA, you cannot touch that money for 5 years. True?
I have a question on ss threshold for a married couple. If I start taking my ss benefit in 2023 with my wife working full time making $70,000 at a private business and not taking ss, is 85% of my benefit taxable? If so, any idea what the tax rate will be? Thank you!
I would have loved to see at least one simple example of taxed SS benefits. Example: Married couple, age 67 (FRA) each receives 2.5K SS monthly, wife receives 1K pension. Assets, 401K totaling 600K, and 2 Roth IRAs totaling 60K. Couple expects to live on 7K monthly. Now simply show the tax tables and calculations. Examples negate misinterpretations, just the facts.
They're giving you money to another Country.they're using you money for them too. We living more poor everyday.
Theys steal our money .
Thank Reagan for double taxation. You pay tax on your gross earnings and then they tax you again when you collect the benefits of ss
Great video! In summary for myself this general rule applied since I have one rental property (via a divorce) Social Security only counts income from employment towards the retirement earnings test. Other kinds of income — including income from rental properties, lawsuit payments, inheritances, pensions, investment dividends, IRA distributions and interest — will not cause benefits to be reduced.
We already paid tax! The government just takes more and more. Cheats!
So no matter what you have to pay a right to be a live fee they call a tax. Just like you will never own your home even though it is paid off. Fail to pay homeowners tax and they will come and take it.
taxing ss is a great way for the government to pay a benefit and take part of it back for their own reckless spending.
1. They are not benefits. They are paid for by employees and employers. 2. SS should not be lumped into the general budget. It should be by itself, and the money collected each tax year should go into that exclusively. 3. It should never be privatized. Too susceptible to white collar crime. In other words, keep your friggin hands off congress.
This guy is so lame and boring he does really have real answers to questions he brings up. You leave more confused watching him.
A flawed system to keep working poor down rich stay rich and when you die your money goes back to Social security
I work for the state of Kentucky and I have a retirement through them so I can't do much with that can't move it.
This is not very clear, HOW can they tax me on money they already taxed me on????????? I'm getting taxed twice, this is stealing!
You take to long to even explain anything.Sucks
Thank you for this video. I am planning waiting until I'm 67 to start collecting my SS. I'm 64 now. I'm hoping Congress doesn't change it to 70 before I get there. I have subscribed so I can keep up with the ever changing rules of capitalism.
Thanks
Hi.. I have a question for you, hopefully you can answer for me.
There's A & B persons.
A.. he reach FRA.. getting SSI thru retirement.. but he keep working full time, still paying as from his pay roll check.. will he still get increase his SSI at the end of the year?
B. A person is reach FRA and totally not working, get SSI Thur his retirement.. will he still get increase his retirement payment by the end of the year?.. thank you..
forrest gump
It's taken out of my check since I was a teenager and now more taxes, that's a bunch of bull that we have to get screwed more when we are older.
No they are not taking anything… It's an INSURANCE policy benefit from my money already taxed. I'm over the IRS.. they're criminals…. AND since supporting gangs, terrorists and insurrectionists is against the law, my quarterly deductions are going to be epic.
Like paying sales tax when you buy a car, then having to pay God Damn property tax every year for owning it!!!! The Govt's are Disgusting!!! Then they just P!ss all our money away and demand more!