by John Bearss
Most people that receive a Social Security Benefit still do not understand if or why their Social Security Benefit gets taxed. If you want to know if your Social Security Benefit is being taxed, look on your last year 1040 form and if there is a number in line 20b, then that is the amount of your Social Security Benefit Income that you paid taxes on last year.
To reduce or eliminate those taxes, then you need to understand the term “Reportable Income”. This is the total of all your incomes that is required to be reported to the IRS on your tax form. These earnings are listed on your 1040 tax form from lines 7 – 21.
Up to 50 percent of your Social Security benefits may be subject to income tax if your reportable income or your Modified Adjusted Gross Income plus one-half your Social Security benefits exceed $25,000 for an individual filing singly and $32,000 if you are married and filing jointly.
If your reportable income exceeds $34,000 for a single filer or $44,000 if you are married and filing jointly then up to 85 percent of your benefits is taxed.
So take time to explore the strategies that will help you eliminate or reduce these taxes.
Interested in learning how to reduce the taxes on your Social Security income? If you would like a free consultation to discuss your financial situation, John can be contacted by telephone at (888) 914-9909 or by e-mail at [email protected]
Have a retirement planning question for John Bearss? Send it to him here.
John Bearss is a registered representative of and offers securities through SICOR Securities, Inc., Member FINRA ∙ MSRB ∙ SIPC, 6500 Poe Avenue, Suite 105, Dayton, OH 45414 | (937) 890.3101.
Neither SICOR Securities, Inc., Lifetime Decisions Management nor their representatives provide legal or tax advice. Please consult your CPA or qualified tax advisor before making any decisions. Lifetime Decisions Management, Inc. and SICOR Securities, Inc. are not affiliated.