Taxing your Social Security income, and how to soften the blow
Many people who start their Social Security benefits get a big surprise when they file their Federal income tax: Social Security benefits may be taxable income if certain thresholds are exceeded. If you file your IRS Form 1040 as a single filer and your “combined income” is less than $25,000, or if you file “married-filing jointly” and your “combined income” is less than $32,000, then your Social Security benefits aren’t taxable. But if you exceed those levels, you’ll find that you could be paying income taxes on up to 85% of your benefits. This Investopedia article by Barbara E. Weltman explains the rules which govern if and how much of your benefits will be taxed, and offers some suggestions on how you can ease that tax burden. Click here to read more.