The IRS Could Take a Cut of Your Social Security Benefits if Your Income Exceeds Certain Thresholds
I've yet to meet anyone who gets excited about filing their taxes, but for most it's a dull afternoon and then they get a refund deposited to their bank account. That's not the case for many seniors, though. There's usually no tax withholding on their retirement account withdrawals, so many actually owe the IRS money at tax time.This gets even more complicated because it's not just income from a job and tax-deferred retirement account withdrawals they have to worry about owing. The federal government can also tax up to 85% of their Social Security benefits if their income exceeds the thresholds for their marital status.Image source: Getty Images.Continue reading
I've yet to meet anyone who gets excited about filing their taxes, but for most it's a dull afternoon and then they get a refund deposited to their bank account. That's not the case for many seniors, though. There's usually no tax withholding on their retirement account withdrawals, so many actually owe the IRS money at tax time.
This gets even more complicated because it's not just income from a job and tax-deferred retirement account withdrawals they have to worry about owing. The federal government can also tax up to 85% of their Social Security benefits if their income exceeds the thresholds for their marital status.
Image source: Getty Images.
