go here: https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable.
don’t be shocked at the results...be mad...
I took mine & wife’s ss benefits thru clean ( no other income, no interest, no taxes withheld all other amounts set to 0 and no to most questions) just to see how much of SS would be taxed if it’s the only income.
$4,000 is the taxable amount.
my wife still has part time income; plus small pension and interest on savings.
She and i will again pay taxes on 85% of the total SS benefits we receive.
We have taxes taken out of our SS checks so it doesn’t hurt.
This year she has to start drawing her on her 401k, so that will be considered income when filing next year’s taxes.
Once she is fully retired (hopefully this year) we’ll still have to pay taxes on our SS benefits in future years...unless Pres. Trump can convince Congress to repeal taxes on SS
The taxes on social security are about to become a big issue for me. I’ll probably start collecting next year. Fact is, when that law, which Biden supported, was passed, it was a rare occurrence where someone had enough income to have their SS checks taxed (never mind that the original money put in SS came from taxable income in the first place). But due to inflation, which is an economic weapon in my opinion, it’s hit the middle class.
The bill should never have been passed, but because most people have the economic knowledge of a prune, they saw it (like income tax in general) as a tax on THOSE RICH PEOPLE when it was first initiated. So they were perfectly fine with it, or at least didn’t complain in sufficient numbers to sway congress.
Anyway, if it was passed with an automatic adjustment for inflation, it would be less burdensome, even though the government’s “algorithm” significantly understates inflation every year (that is, when they say it’s 6%, it’s likely 9% or more, but your income increase will be based on the understated number).