The other side of the COLA coin - MarketWatch
We have all read the headlines concerning the 2023 Social Security cost-of-living adjustment (COLA) could be the highest in 40 years. However, no one has mentioned the possible consequence of this potential historical increase: Taxes. Since 1984, Social Security beneficiaries with total income exceeding certain thresholds have been required to claim part of their Social Security benefits as taxable income. You must pay taxes on your benefits if you file a federal tax return as an “individual” and your “combined income” exceeds $25,000. If you file a joint return, you must pay taxes if you and your spouse have a “combined income” of more than $32,000. Jessica Hall discusses the taxation of Social Security benefits and why the income thresholds have not been adjusted for inflation. Read Ms. Hall’s article here…
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