Recently, headlines and emails claimed that federal taxes on Social Security had been eliminated. Unfortunately, that’s not true – no federal tax on benefits has been repealed. While some legislation has been proposed, no changes to federal Social Security taxation have taken effect.
This confusion has left many retirees wondering what’s real. The truth is, up to 85 percent of Social Security benefits can still be taxed, depending on your income. New legislation does allow for a $6,000 deduction in some cases – get the facts here.
How about state taxes? The good news is that most states don’t tax Social Security at all. In fact, only nine do, and one of these is already in the process of phasing them out. Knowing your state’s tax stance can help you plan more effectively.
We believe seniors deserve clarity and financial security, so they can maximize their benefits and plan their retirement with confidence. In Part 2, we’ll share simple strategies that may help reduce your Social Security tax burden and protect more of what you’ve earned.
Don’t forget to sign our petition to help protect the future of Social Security.
