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That money is taxable if the child has sufficient income (from Social Security and other sources) to have to file a return in his or her own name. Supplemental Security Income (SSI) is never taxable. If you do have to pay taxes on your benefits, you have a choice as to how: You can file quarterly estimated tax returns with the IRS or ask Social ...
John Waggoner is a contributing writer of all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously, he was a reporter for Kiplinger’s Personal Finance and USA Today and has written books on investing and the 2008 financial crisis.
One of the enduring myths about Social Security is that benefit payments are not subject to federal income taxes. This was true from the program’s inception in the 1930s until Congress overhauled its financing in the 1980s, but for 40 years now, some portion of Social Security income has been taxable for some beneficiaries.
Loading up taxable investment accounts with assets that generate lots of income, such as real estate investment trusts, dividend-paying stocks or most types of bonds, can increase the tax hit on your Social Security benefits. An alternative strategy might be putting income-generating investments into tax-deferred accounts such as IRAs and 401(k)s.
Social Security administers the program, but money from the U.S. Treasury, not your Social Security taxes, pays for it. Federal SSI payments in 2024 max out at $943 a month for an individual and $1,415 for a married couple when both spouses are eligible. Those benefits are not subject to income tax.
Learn how your spouse's income affects your Social Security benefits if you claim them early or collect spousal benefits. Find out the earnings limit for 2024 and when it disappears.
Since 2016, the share of Social Security recipients paying taxes on benefit income has inched up from 41 percent to 48 percent, according to Social Security Administration (SSA) data. Over the same period, the amount of taxes they’ve paid has increased by nearly half, from $32.8 billion in 2016 to $48.6 billion in 2022.
Provisional income is adjusted gross income (line 11 on your 1040 tax form) plus tax-exempt interest income plus 50 percent of your Social Security payments. If those add up to more than $25,000 for an individual or $32,000 or a married couple filing jointly, you pay federal taxes on a portion of your benefits, regardless of your age.
Learn how Medicare premiums, work income, taxes, government pensions and other factors can reduce your monthly Social Security benefit. Find out how to apply for withholding, recoup overpayments and avoid garnishment.
Yes. In fact, if you are signed up for both Social Security and Medicare Part B — the portion of Medicare that provides standard health insurance — the Social Security Administration will automatically deduct the premium from your monthly benefit.