When You Need to Pay Taxes on Social Security
It often comes as a shock to retirees that income tax may be due on a part of their Social Security benefits. It’s not a new tax, as the idea first was enacted in 1983 and then broadened in 1993. Emily Brandon of Yahoo News explains retirees who have several sources of income, including pensions, retirement account withdrawals or part-time work, might have to pay taxes on part of their Social Security benefit, as all the combined income would likely push them over the threshold where tax kicks in. The federal government taxes up to 85% of Social Security payments for seniors who earn more than a specific threshold, but never taxes the full benefit. Brandon explains this and even offers strategies to minimize the tax bite in the full article here.