Tax time is here, so listen up retirees: Your Social Security benefits might be taxable.
But what exactly does that mean?
First: You dont have to worry about this if Social Security is your only source of income.
Need a refresher on Social Security benefits? Here are12 frequently asked questionsabout how the program works.
Heres what you gotta know.
How Are Social Security Benefits Taxed?
Not everyone is taxed on theirSocial Securitybenefits.
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Go ahead and start now, but be sure to bookmark this post so you could easily return later.
Well keep it updated as offers changes or expire.
The amount of tax you may owe depends on other income you receive this year.
To figure out if you owe taxes, the Social Security Administration considers whats known as your combined income.
Heres how it works.
Thats well below the $25,000 limit for single filers.
And remember, Social Security only includeshalfyour benefits when determining your combined income.
An even bigger 8.7% COLA went into effect in January 2023.
More Social Security recipients pay the tax on a portion of their benefits as incomes increase over time.
Lets imagine Bob receives $1,700 a month in 2021 from Social Security or $20,400 a year.
They do not include Supplemental Security Income (SSI) payments, which arenever taxable.
Heres a table of the2022-2023 tax bracketsfor reference.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
She focuses on retirement, Medicare, taxes and investing.
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
