• MICHAEL LOFTUS

What Is The Taxable Amount On Your Social Security Benefits?

Today, we're going to talk about taxation on Social Security. Yes, in fact, you do get taxed. Some people consider it a double tax⁉️⁉️




A couple of weeks ago I had a conversation with a client who was not happy that they were being taxed on their Social Security benefits, and understandably so! The government wants their piece. Now, your taxation depends on how much money you're making. So let's first take a look back and then give you some examples.



In 1983 the Amendments to the Social Security Act came out, which at this time 50% of your Social Security could be taxed. In 1993 the Deficit Reduction Act , went up to 85%. So between 0 and 85% of your Social Security can be taxed. So how do you figure out taxation on Social Security. You need to use what the IRS calls combined income. This is a combination of a AGI (adjusted gross income) plus tax exempt investments, that would be bonds, in 50% of your Social Security benefit. Then you apply that to these tables, threshold tables, whether you're single or married and filing joint.


Here is a chart to help you visualize what we are talking about, this is a lot of information, and it is easy to get confused.






Single, married, filing jointly, taxable benefit (the percentage that's going to be taxed) Single 0 -25k, 0-32k if married, 0% of Social Security will be taxed. Now, remember, I'm talking about just Social Security, not your federal or state tax rate, those are completely different. Single 25k-34k, 32k-44k for married, and 50% of your social security will be taxed. If you are above 34k-44k, 85% is now going to be taxed.


State taxes on Social Security




Every state is different.


⁉️DISCLAIMER⁉️ I am a financial adviser, not an accountant, however I do understand it. This is part of our planning process. I strongly suggest to either work with an accountant, or get software, because when you get your tax return you're going to fill out a social security worksheet.



It will all need to be filled out, everything that we have talked about will be on there. It will give you that 29,000 dollar amount we talked about, which is taxable.


This is why having a financial plan is so important. As always, thanks for reading!



0 views

GET STARTED

SCHEDULE A VIRTUAL APPOINTMENT

Being virtual means you do not have to leave the  safety and comfort of your home.  As long as you have a device and the internet, we can meet.  Meet us when it is convenient for you, from wherever you are.  We can engage with you via Zoom, a secure, on-line environment.  

Want us to contact you?  Just fill out the form below and we get back to you as soon as possible.

To schedule a meeting in person call our office at (302) 251-8901

MAILING ADDRESS:

32828 Reba Rd, Suite C

Millville, DE  19967

PHONE:

(302) 251-8901

Check the background of your financial professional on FINRA's BrokerCheck- https://brokercheck.finra.org The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by third parties to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

*Securities and advisory services offered through United Planners Financial Services, member FINRA, SIPC. Loftus Wealth Strategies and Untied Planners Financial Services are not affiliated. 

*We are licensed to sell Securities in DE,PA, MD,IL,NC. Insurance-related services may not be provided to individuals residing in any states other than DE,PA, MD,IL,NC.

302-251-8901

  • YouTube - White Circle
  • Facebook - White Circle
  • LinkedIn - White Circle
  • Twitter - White Circle