Social Security & Income Taxes: Know the Rules & Plan Ahead
It can be a shock to learn you have to pay income taxes on Social Security benefits. Not all people do, so knowing the thresholds is key to understanding whether tax is due or not. The IRS determines who is required to pay income tax on Social Security benefits using a figure called “Combined Income.” Note this is not the same as “Adjusted Gross Income”. Combined Income is the sum of “Adjusted Gross Income” plus nontaxable interest plus half of your Social Security benefits. Read the full article by James Holloway, Sr. here, which includes information on the different brackets based on filing status and how to make estimated tax payments or start tax withholding.