About paying taxes on your Social Security income
Taxes are one of two inevitable things. And while that’s well known by most when it comes to earned income and investment income, your Social Security benefits may, or may not be, taxable income also. Where you live might affect your taxes as well, because 37 states do not levy State income taxes on Social Security benefits, but 13 States do. As for Federal taxes on your Social Security benefits, your total “combined income” is what determines if any of your Social Security will be taxable. Sound confusing? Well it can be, which is why it’s important for you to consider your tax obligations in retirement, because where you live and what your combined income is can have a serious impact on your spendable cash. In this Motley Fool article by Katie Brockman, the author identifies the States which do no tax your Social Security benefits and also explains how the IRS determines if your Social Security benefits are part of your taxable income. Click here to read more.