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Do I Still Pay Taxes on Social Security Income?
from:Most often when people are disabled, they end up receiving social security. What scares people the most is they wonder how they can afford to live while paying taxes on social security income; or if they even have to pay taxes on social security income.
For many people, the question "Do I still pay taxes on social security income" is one of the most asked questions. It may not be for them, possibly a spouse, sibling, or parent; but it is still on their minds. The answer; is both yes and no.
Most people when they collect a social security income, they are retired. However, because people are living much longer than those in the past, are also working longer. Therefore, many times when people hit retiring age, they are still working. So, they choose to keep working and collect the social security income at the same time. So, if you continue to work as well as collect social security income, yes, you will have to pay taxes on social security income. Therefore, the only time you wouldn't have to pay taxes on social security income is if that was the only income you had coming in!
When it comes to paying taxes on social security income, all within the last 15-20 years did the laws change. In fact, in 1983 is when the law changed stating that retirees with an annual income above the limit must pay taxes on social security income. When a person makes $25,000-$34,000, they may have to pay 50% of their benefits to taxes; and so on; going by what they make. However, the most taxes a person will have to pay in their social security income are 85% taxes.
Also, in 2005 the Social Security Administration had changed the social security income again. It was changed so that taxes will only be taken out of a workers wage for on the first $90,000. There after, no more social security will be taken out, and everyone will be paying the same amount of taxes for their social security income.
So, if you are a person that is thinking about collecting your social security income, the most beneficial thing for yourself to do is to retire completely. Then once you're completely retired, start collecting your social security income. If you retire first, then you will not have to pay taxes on social security income! Whereas if you collected them while working, you will be paying taxes on both incomes coming in!!
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Uncertainty Surrounds Tax Planning, CCH Says (SmartPros Accounting)
Sept. 22, 2008 (SmartPros) As 2008 heads into the fourth quarter, taxpayers who want to minimize their tax burden for this year and next have a range of options, but also face a considerable amount of uncertainty, according to CCH, a Wolters Kluwer business.
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