Many people are surprised to learn that their Social Security retirement benefits might be subject to federal income taxes.
Many Americans are surprised to learn that they can be taxed on their Social Security retirement benefits as explained in My San Antonio’s article: “Will I Pay Taxes on My Social Security Benefits?” People believe the money they receive was already taxed when they paid into the system.
As a result, to tax it again amounts to double taxation.
However, the federal government views it differently.
The total amount most people pay into the system equals 15% of the total value of lifetime benefits. As a result, up to 85% of Social Security benefits can be taxed and it will not be double taxation.
But not everyone is required to pay federal income taxes on their benefits. It depends on the other income a person makes.
The basic rules are as follows:
Additionally, in 13 states Social Security benefits are subject to state income taxes.
Reference: My San Antonio (March 20, 2016) “Will I Pay Taxes on My Social Security Benefits?“
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