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Social Security and Federal Income Tax: An explanation
It can be a surprise to the newly retired…your Social Security benefit may be (probably is) subject to federal income tax. For those not aware, since 1983 these benefits have been subject to income tax on a tiered basis. The problem for so many folks, though, is that the tiers have not been indexed for inflation since 1983, and thus affect about 50% of households. Originally expected to impact only a handful of really high earners, the absence of inflation adjustments have made it an issue for many. But that complaint aside, it’s good to know the rule as it stands today. Check out this post by the Orlando Sentinel for details…