Forum Thread

Paying taxes on Social Security benefits

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  • YellowSubmarine
    2015-04-15 03:58:56 PM
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    Come to find out, there are actually scenarios to where you will need to pay some taxes on your Social Security benefits. If you make a combined income of no more than $25K, or $32K/yr as a joint filer, you will not have to pay any taxes on SS benefits. But over that, you will.

    Depending upon how much over, the tax is between 50-85% of your benefits received. Just something to keep in mind. If you are solely living on Social Security, likely you won't ever have to worry about this. But if you have other supplemental income, like another job after retirement or investments that continue to earn that count as income, you will need to keep this in mind.
  • J.K.Logic
    2015-04-15 10:08:03 PM
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    Good info. But I find it a little disheartening that someone pays into SS their entire working lives, only to have certain scenarios to where they will have to pay taxes on the very benefit that they paid so much in taxes for, for decades. A majority of my tax goes straight to health care national services like Medicaid/Medicare, and another good chunk goes toward Social Security.

    Can anyone more familiar with this tax on SS benefits explain the reasoning here? Because on the face of it, it seems unfair..
  • justin412
    2015-04-16 09:56:56 AM
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    J.K.Logic Wrote: Can anyone more familiar with this tax on SS benefits explain the reasoning here? Because on the face of it, it seems unfair..
    I actually don't think this is that bad of a thing. Social Security's original intent was to give supplemental income to seniors who were struggling in the Great Depression and was never meant to be drawn for decades while a senior continues to work but still wants to draw their benefits. If an individual wants to draw it while also earning income outside of it then I don't necessarily see a problem with taxing it at a higher rate, but I don't know if I agree with the high rate that it currently sits at.
  • J.K.Logic
    2015-04-21 12:03:42 AM
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    Yeah, seniors are looking at 50-85%. That does seem high. I wonder what that really comes to? Anyone have to pay taxes on SS benefits here that can give me an example? Maybe its not AS bad as I think it sounds.
  • Buslady30
    2015-05-22 01:26:23 PM
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    Hi Guys. Don't know yet as to taxes Just started getting a check but still work so I'll find out soon. Just wondered why if anyone knows why they penalize a widow for having a pension(I drove school bus) & not give part of a husband's social security. He paid into SS for years as a self employed person---both parts--& I get no part of it because of my pension plus I get less of mine. Seems unjust. He worked hard & I had to work 2 jobs but I get penalized because he passed.
  • JaredS
    2015-05-22 01:43:51 PM
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    Buslady30 Wrote: Hi Guys. Don't know yet as to taxes Just started getting a check but still work so I'll find out soon. Just wondered why if anyone knows why they penalize a widow for having a pension(I drove school bus) & not give part of a husband's social security. He paid into SS for years as a self employed person---both parts--& I get no part of it because of my pension plus I get less of mine. Seems unjust. He worked hard & I had to work 2 jobs but I get penalized because he passed.
    Hello busylady.

    I agree that it's not very fair. My parents are in the same situation because my mother was a teacher. She will not be able to claim my fathers benefits if he passes before she does for the same reason. I don't agree with it, but that's the law as it's currently written. That doesn't mean it may eventually change, but it will take a change in the law before people like you and my mother would be able to claim Social Security benefits.
  • toothdoctor
    2015-05-27 10:08:02 PM
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    Social Security originally was not a retirement income in was set up to be a widows benefit. If you earn over a certain amount you will be paying taxes based on total income earned regardless of if it is from corporate America or government. You should wait until you are at max age to draw ss because any amount over the max set by ss you will be offset 2 dollar from ss for ever 1 dollar over the max bracket plan on it. I have been drawing my Social Security for the last three years and I'm retired government employee. When combining both incomes this pushes me into a higher income tax bracket so each yr I must write that check to the treasury because not enough is withheld.
  • JaredS
    2015-05-31 07:53:00 PM
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    toothdoctor Wrote: You should wait until you are at max age to draw ss because any amount over the max set by ss you will be offset 2 dollar from ss for ever 1 dollar over the max bracket plan on it.
    I agree, but this is much easier said than done for far too many Americans.
  • LivingWanOlderGal
    2016-02-04 01:21:20 PM
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    I don't think the tax is 50% to 85%. I think 50% to 85% of the benefits you receive is taxable.
  • AlAward
    2016-02-10 01:10:20 PM
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    I believe LWOG is correct. Once over the earning threshold you are taxed only on the appropriate % of benefits, you are NOT giving up that entire percentage.

    Example: Your final tax rate as determined by your Adjusted Gross Income on your 1040. Lets say you end up in the 18% bracket, then your benefit percentage, that is taxable (50%-85%), will be taxed at 18%.

  • Lightathorizon
    2016-02-15 04:58:36 PM
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    18% is correct or if there is another amount it is certainly not 50-85%. I do my wife's taxes and the taxable amount is 85%. She had to contact them, to take out taxes, initially, which they didn't automatically do. Now she has to up it, we found out, because they are still a bit short per month, in deductions.

    Please get a Social Security Administration online account, read benefits, taxes, how to and use Q and A links. Make a list of questions to ask. Make contact with a rep, get their name, contact information, ask them what you should know about completing forms whether online or by mail for all information or get the link.

  • YellowSubmarine
    2016-04-09 01:09:09 PM
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    AlAward Wrote:

    I believe LWOG is correct. Once over the earning threshold you are taxed only on the appropriate % of benefits, you are NOT giving up that entire percentage.

    Example: Your final tax rate as determined by your Adjusted Gross Income on your 1040. Lets say you end up in the 18% bracket, then your benefit percentage, that is taxable (50%-85%), will be taxed at 18%.

    Yes. You and LivingWanOlderGal are correct.

    I didn't mean to be misleading. But that is what my original post meant.

    Depending upon how much over, the tax is between 50-85% of your benefits received.

    I get that that sounds like the tax rate will be 50-85%. I just awkwardly worded that. What I meant was there will be a taxable rate (a % that you need to lookup or inquire about) ON 50-85% OF your benefits received.

    Sorry about that confusion. Thanks for clarifying!

  • Alexander
    2016-08-10 11:39:50 PM
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    This would help me get homless off the streets and keep them from taking from one another.
  • JaredS
    2016-08-22 03:18:38 PM
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    Alexander Wrote: This would help me get homless off the streets and keep them from taking from one another.
    I'm not sure I understand what you mean. Taxes on Social Security income and homelessness are entirely different things.
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