The current taxation of Social Security benefits
Despite the fact that social security represents money you were taxed on during your working years, payments may be regarded as taxable income.
Your "combined income," as defined by the government, includes half of your social security payment; it is this income that is used to calculate the portion of your benefit that is due to federal tax.
If you file individual dederal taxes and have a combined income of: You could have to pay income tax on up to 50% of your benefits if your income is between %25,000 and $34,000.
Over $34,000, up to 85% of your benefits can be subject to taxation. if both of you file joint federal income taxes and have a combined income of:
You could have to pay income tax on up to 50% of your benefits if your income is between $32000 and $40,000
In general, Annual inflation adjustments are made to income tax bands. However, social security hasn't been shown the same courtesy for almost 40 years since it has been treated as taxable income.
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