Taxation of Social Security Benefits
“How can I avoid having my Social Security benefits taxed?”
That is a question we are regularly asked here at the AMAC Foundation’s Social Security Advisory Service. And the unfortunate answer for many who ask is that “you cannot!” As the old saying goes, “the only things certain in life are death and taxes.” And while that is surely so, there actually is one circumstance which means you may not have to pay income tax on your Social Security benefits – you must have very low taxable income.
A historical perspective
For background, let’s review the history of taxation of Social Security benefits. Originally, from the late-1930s inception of the Social Security program, all benefits were received tax free. And that lasted for over 43 years, to a time when the Social Security program experienced financial difficulties. Those financial difficulties came to a head in about 1982, when Congress finally came to grip with what the Trustees of Social Security had been telling them for years – that Social Security would become unable to pay full benefits starting in 1984.
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