How to Reduce or Eliminate the Taxes on your Social Security Income
by John Bearss, Retirement Specialist
As January rolls around many people start thinking about getting prepared to have their income taxes done. In January you will receive all of the information you will need to complete this project. However, 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. It could save you a lot of money and thank you for joining me this week for your retirement minute.
Interested in learning how to reduce the taxes on your Social Security income? Contact Retirement Specialist John Bearss by email: email@example.com
The Retirement Minute with John Bearss
John Bearss, Retirement Specialist (Christian Financial Advisor Network)
John R. Bearss is a Retirement Specialist with the Christian Financial Advisor Network. He has been successfully helping clients nearing retirement generate lifetime income streams for 25 years. He can be reached directly by email at firstname.lastname@example.org