Surprise!! Your Social Security Benefits May Be Taxable - USA Today
Many a new Social Security beneficiary finds a surprise when they first file their Federal income tax the following year – Social Security benefits received during the tax year may be included as part of their overall taxable income. And, depending on where they live, they may also find that there is a state income tax on their Social Security benefits as well. The unfortunate reality is that the IRS includes part of your received Social Security benefits in your taxable income if your “provisional income” (combined income from all sources, including half of your SS benefits) is high enough. And as a double whammy, the federal thresholds at which your benefits become taxable haven’t changed since they were first established decades ago. And although 38 U.S. states exempt Social Security from state taxes, 13 states tax SS benefits in certain circumstances. So, before you decide when to claim your Social Security benefits, be sure to evaluate how that additional income will impact your tax obligation. All of this, including how to mitigate taxation of your Social Security, is included in this USA Today article by Katie Brockman.
Also, if you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of this program. Learn more about it here…