Paying Taxes on Social Security
Some people, mostly unaware, will have to pay taxes on their Social Security benefits. This does not affect everybody, however those who will have to pay may be taxed on up to 85% of their benefits. This is not an insignificant amount, doubly so if you are not aware that you will have to pay these taxes. You are held accountable for these taxes if you meet certain thresholds when combining income from Social Security with income from other sources. The threshold for these taxes to kick in is $25,000 when filing as an individual and $32,000 as a couple. This is only for federal taxes, states each have different rules and cut off points, however only 13 states currently tax Social Security benefits. For more information visit this article by Matthew Frankel with The Motley Fool.
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