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Thoughts on Avoiding the Tax Bite on Social Security Earnings

It should not come as a surprise to new Social Security beneficiaries, and it’s certainly not news to more than half of the beneficiary population already enduring the pain that comes with seeing as much as 85% of that earned benefit added to their taxable income. As the saying goes, it is what it is, but it hasn’t always been so. Subjecting Social Security benefits to federal income tax first became a reality back in 1983 and, at least initially, it was intended to impact only “high-income” folks. Unfortunately, the income thresholds put in place in 1983, and adjusted again in 1993, have never been adjusted for growth in wage levels, to the point that now more than half of all beneficiaries are hit with the tax.

So, what do you do about it? Moneywise contributor Vawn Himmelsbach, in a post on, offers some suggestions to minimize the tax pain along with a summary explanation of the process that leads to the tax in the first place. Check out her post here.

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