Blindsided by Social Security Benefit Taxes? This Could Make Your Life Easier in 2025.
Tax season usually brings a refund check for most workers, but if you're retired, you could wind up owing the IRS. It depends on how much you withdrew during the year and whether your savings were pre-tax or Roth, among other things. Your retirement account withdrawals might not be your only taxable income, either.The federal government can tax up to 85% of your Social Security benefits, and nine states tax the benefits of some residents as well. These taxes catch some seniors off guard and cost thousands of dollars per year. But there is something you can do to avoid a surprise tax bill in the future.Image source: Getty Images.Continue reading
Tax season usually brings a refund check for most workers, but if you're retired, you could wind up owing the IRS. It depends on how much you withdrew during the year and whether your savings were pre-tax or Roth, among other things. Your retirement account withdrawals might not be your only taxable income, either.
The federal government can tax up to 85% of your Social Security benefits, and nine states tax the benefits of some residents as well. These taxes catch some seniors off guard and cost thousands of dollars per year. But there is something you can do to avoid a surprise tax bill in the future.
Image source: Getty Images.
