At what age is Social Security no longer taxed in the US?
How much of our Social Security benefits should be taxed?
Should any of our Social Security benefits be taxed?
Are we being taxed twice on the same income, since workers pay into the social security fund throughout their working years?
Are the income thresholds to determine taxability of social security income fair?
All interesting questions which generate a firestorm of opinions on each side of the issue.
S E E D E D C O N T E N T
S ocial Security benefits are modest compared to past earnings of recipients, so the annual cost-of-living adjustment (COLA) increase is vital to help the monthly payments keep pace with inflation. However, as the dollar amount that beneficiaries receive inches upward they could be in for a rude surprise; they may surpass thresholds established, above which a portion of their Social Security income becomes taxable.
Before 1984, Social Security benefits were not taxed . However, to keep the Trust Fund that supports the program solvent, bipartisan legislation was passed to tax a portion of payments to seniors citizens, surviving spouses, and the disabled if they had income above certain thresholds.
At the onset, less than one in ten beneficiaries paid income tax on their benefits. But that percentage has risen over time. Unlike benefits, the thresholds were not indexed to inflation and in the intervening four decades no inflation adjustments have been made. This meant that as benefits rose, more recipients crossed over the thresholds. Now 56 percent of beneficiaries pay income tax on a portion of their benefits, sometimes as much as 85% if their total income exceeds upper thresholds.
There is no age at which you will no longer be taxed on Social Security payments . So, if those payments when combined with your other forms of income, exceed one of the two thresholds, then you will have to pay at least federal taxes on either 50% or 85% of the benefits you receive. At the state level, there are only nine that currently tax Social Security benefits .
How are Social Security payments taxed?
The tax rate for Social Security benefits varies based on the taxable household income of recipients . As well, one’s tax bracket is dependent on the filing status of the Social Security recipient.
Individuals with a Total Gross Income , including Social Security, of more than $25,000 will be taxed on up to 50 percent of their Social Security income. Couples who file jointly will begin being taxed when their total income exceeds $32,000.
Individuals earning more than $34,000 , or couples with a combined gross income of at least $44,000 , will be taxed on up to 85 percent of their Social Security benefits.
Typically it is only retirees , who have very little household income aside from their Social Security entitlement, who could be exempt from any form of taxation on the payments.
How is the Social Security tax rate calculated?
The rate of taxation levied on Social Security payments is similar to that of other forms of income. Filers must submit their adjusted gross income , which combines their salary, Social Security benefits and all other sources of taxable income. If that total exceeds the minimum threshold then at least 50 percent of your Social Security benefits will be considered taxable income and will be treated as such.
The issue to be discussed is social security being taxed
The issue is not Biden, the issue is not Trump, the issue is not MAGA, the issue is not liberals or conservatives.
Please discuss the issue
Please be civil to one another, if you are unable to be civil pray do not participate
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Adam Smith: "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things."
Anonymous: "The best things in life are free, but sooner or later the government will find a way to tax them."
130 Inspirational Quotes About Taxes | Inc.com
The portion of your benefits subject to taxation varies with income level. You’ll be taxed on:
For the 2024 tax year, nine states will also tax Social Security to varying degrees: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Vermont, Utah and West Virginia.
How Are Social Security Benefits Taxed? (aarp.org)
The problem here is that most people have a lot more than Social Security when they retire. It was never meant to be a retirement plan by itself, although I do know that some people only wind up with it when their working days are over. A lot has morphed out of a program that once paid for itself. I think the question is more about remodeling SS that whether or not we tax it. I could be in favor of a law that would shelter SS benefits from taxation if SS was means tested. In other words, everyone should pay into it from the day they start working until the day they retire, but only those who are earning less than $250,000 per year upon retirement should receive benefits.
Interesting approach.
I personally think that perhaps the total Income (to your point above) level at which social security becomes taxable needs to be adjusted a bit but think that all who pay into social security through their life should be able to benefit from it, ith the entire amount being taxable income at some AGI level.
Some might look at your idea above and see it as penalizing those who are able (and willing) to save and sacrifice to build a secondary source of retirement income, which seems unfair.
Tweedle Dee and Tweedle Dum, let's blow some smoke and have some neoliberal fun.
Yep, Social Security benefits are income tested so a portion will be counted as ordinary income. It's been that way for 40 years. In contrast, all of 401k or IRA distributions are counted as ordinary income without any testing. And Wall Street doesn't like favoritism towards labor so they'll flimflam, bamboozle, and fearmonger to lobby for the same favoritism. A private sector bank tax is preferable to any revenue collected by gubment. The Wall Street shysters and financial pirates are being cheated and it just ain't fair. The word for that argument is spelled B-U-L-L-S-H-I-T.
Now this doesn't necessarily mean you'll be paying Federal income taxes since there are rather generous deductions at both ends of the tax code. But the hanky panky in the tax code opens the door for higher rates of state income taxes. And New Yorkers will suffer more than Floridians or Texans under these tax rules. So, we're likely to hear more squeals from big blue islands than anywhere else.
And the hell of it is that none of the taxes collected from retirement benefits is returned to the retirement system. All the revenue collected from taxing SoSec and 401k/IRA distributions goes into the general treasury where it can buy hotel rooms for illegal immigrants. Finance has been screwing the country since Reagan opened the door and Clinton knocked the door off the hinges. Everyone is 40 years too late in complaining about what the neoliberals did to the country; they've already gotten theirs and have moved on to greener pastures. There's an app for that now.