Here's How Much Will Your Social Security Be Taxed... Again...

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Күн бұрын

A lot of rumors swirling around Social Security. More specifically, how Social Security is taxed. You were already taxed with FICA taxes to earn Social Security, and now it can be taxed... again?!
The answer is yes, up to 85% of your Social Security income may be taxable. We'll walk you through how it all works.
How much of your Social Security that will be taxable depends on how much other income you make. This video will show you how to determine how much of your Social Security income will be taxable, and exactly what that means.
You can download the spreadsheet we use here:
theretirementnerds.com/social...
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Want help with your Social Security Strategy?
Email me!
Erik@TheRetirementNerds.com
Visit our website: www.TheRetirementNerds.com
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This video is NOT sponsored.
The Retirement Nerds is the no-cost educational platform and serves to offer information around Medicare, Social Security, Financial Planning, and Estate Planning.
⏰ TIME CODES ⏰
0:00 Intro
0:52 Taxable Definition
1:45 Chart Instructions
5:13 Scenario 1: Social Security Income Only
6:34 Scenario 2: Some Other Income
8:00 Scenario 3: Higher Other Income
9:24 Summary of Scenarios
9:42 State Exceptions
10:11 Strategies to Use
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#socialsecurity #taxes #socialsecuritytaxes #90daysfromretirement
Federal Disclaimer:
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all your options.

Пікірлер: 331

@Theretirementnerds Ай бұрын

Please note that the deduction cell in the spreadsheet is editable and it is NOT tied to your single/married status for a few reasons: 1. The standard deduction changes every year, so by making this an editable box, you can use this spreadsheet this year, next year, and as long as Social Security taxation works the way it does. 2. The deduction changes based on how old you are, so for those above 65, you can put in you deduction while those under 65 can use theirs. 3. Many people do not take the standard deduction, and itemize their deduction instead. Since this field is fully editable, that means the spreadsheet will work for these folks as well. Hope this helps :) Isn't an error. It is intentional.

@ziggy29 4 ай бұрын

It is absolutely criminal that those taxable thresholds are not, and have never been, adjusted for inflation.

@tomm7505 4 ай бұрын

You're right. Even if they would just double them, it would make a big difference.

@Theretirementnerds 4 ай бұрын

Pretty crazy, right?

@roachtoasties 4 ай бұрын

It was done under the Reagan administration, and Congress since then hasn't lifted a finger to change it.

@Dumbluck14 4 ай бұрын

It is criminal!

@brandonswan9247 4 ай бұрын

Social security was never supposed to be taxed. They added tax to prevent the program from going bankrupt. They don't adjust the thresholds to help the system go longer before bankruptcy. However it's still going to go bankrupt if they don't do something in the next 15 or so years.

@alihossan6655 4 ай бұрын

I started my SS at 62 1/2, my wife who is 20 months younger than me started at 62. With my pension for working 25+ years we’re doing just fine.That was over 3 years ago & we never looked back. Haven't touched our investments other than to travel. I had two brothers die of cancer 3 years apart. One died at 62 & never drew a dime of his SS. The other died at at 65 & drew 10 months. Let's be honest here, the reason the Government is offering you a bigger payday at 70 is because they're banking on you not making it!

@Suzieshaw1 4 ай бұрын

It sounds like you've made some wise decisions regarding your Social Security and pension, but I'm sorry to hear about the loss of your brothers. Planning for retirement is crucial, especially with uncertainties like health issues. Before it's too late, it might be a good idea to seek the guidance of a financial advisor who can help you make the most of your investments and ensure a comfortable retirement. They can help tailor a plan that suits your needs and goals, giving you peace of mind for the future. It's never too late to start planning for a secure financial future.

@eabhaconnor 4 ай бұрын

Absolutely, I completely agree. Getting a financial advisor early on is crucial. I've witnessed firsthand how much of a difference it can make. With my advisor's assistance, I've grown my investments to $930k by trading stocks, which has significantly boosted my confidence about the future. So, take your time to find someone you can trust. It's definitely worth it in the long run.

@TheRedgtv2000 4 ай бұрын

Absolutely and remember if you wait until 67 or 70 you will get nothing for 5 years. Also remember the time of your life is more important than anything else!

@rexrefuerzo4188 2 ай бұрын

Welcome to the club...😂

@rongendron8705 Ай бұрын

Only 5% wait to age 70, to collect it!

@bethbyerlein7175 Ай бұрын

AMAZING content, best description ever of how SS is taxed. Way to go.

@Theretirementnerds Ай бұрын

Thank you so much!

@gladegoodrich2297 3 ай бұрын

Almost 80 and give my entire Social Security income, and more back to the government every April 15th. This is called the penalty for working hard and being successful. I have never had a tax refund in 60 years. So tired of paying for those who won't help pull the load.🙄

@kennethhughley1611 3 ай бұрын

It's your money and your drop in the bucket they don't need. Deficit, ever heard of a black budget and red budget? Why does Congress continue to draw their full check when they leave? The hundreds of them forever? Taxed when I make it, taxed when I spend it, taxed when I save it. Nah, give me all of it!

@hitmanhite8958 2 ай бұрын

52, planning now to avoid exactly this situation. Last couple of year it may be better to take a lower paying job to start Roth conversions, I don’t know but a tax guy would.

@THEL0NEARRANGER 2 ай бұрын

What are you doing wrong? I have been retired for over 10 years and have never paid any taxes. I am almost a multi millionaire.

@davidcelliott Ай бұрын

@@THEL0NEARRANGER It sounds to me like he makes so much money that he doesn't really need SS and it pays most of his taxes on his other income, which is probably quite substantial.

@jimcurry5458 Ай бұрын

Republicans say small government and no tax increases. Oh wait, who was president in 1984? Yep, Ronald Reagan.

@mr-vet 3 ай бұрын

Neither social security nor any other public pension (govt/military pensions) should be taxed by state, local or federal, in my opinion.

@edwardglatzmayer5466 2 ай бұрын

Military yes absolutely no tax. Government- No way, they created this mess!

@mr-vet 2 ай бұрын

@@edwardglatzmayer5466 federal civilian retirement…not elected or political appointees…

@mr-vet 2 ай бұрын

@@edwardglatzmayer5466 government didn’t, politicians did.

@godschild2-yd3jy Ай бұрын

Politicians live free off taxpayer money even after they leave the office.

@LamNguyen-qb4ic 4 күн бұрын

Thank you very much for a video and a spreadsheet. Of course, I just subscribe it. I appreciate so much.

@Theretirementnerds 4 күн бұрын

Of course! Thank you for watching!

@harveyh3696 4 ай бұрын

My head is kinda spinning. Will rewatch again. Hopefully I totally get it after the next viewing! :) Luv these videos!

@Theretirementnerds 4 ай бұрын

Thank you for watching! Be sure to download the spreadsheet and you can mess with your own numbers.

@larrynorth39 4 ай бұрын

I volunteer as a TaxAide consultant at our Senior center, I have been asked many times "what part of my Social is Taxed" I usually say something vague, like it's way complicated! And they look at me like I am a dunce. - Now I have an explanation. Thanks

@jhors7777 4 ай бұрын

Thank you for posting this helpful video

@Theretirementnerds 4 ай бұрын

Thank you for watching :)

@brawnko1173 4 ай бұрын

Nice video and very clearly explained, thanks!

@Theretirementnerds 4 ай бұрын

Thank you so much!

@tomr9074 3 ай бұрын

Best video I Ave seen on this yet. I made my own spreadsheet from watching Jeff S videos. I never knew that it was the lesser of the two. That explains why one year it was the full 85% and the next it was progressive. Thank you.

@Theretirementnerds 3 ай бұрын

So glad it was helpful! Thank you for watching!

@reeceball 4 ай бұрын

Thank you so much for this second video! It took a little while studying the spreadsheet before I got most of it from the first video. But I invest all of my retirement money (at least for now) into Roth accounts, and I was super confused about how that was going to fit into the calculations; it’s nice to know I could have a close to 0% tax rate by retirement since my Roth income wouldn’t be included in the calculations! I’m only 27, but I enjoy learning about all this now and I honestly should’ve pursued a career in accounting or finance 😆 I love the deep dives and attention to detail you have in your videos!

@Theretirementnerds 4 ай бұрын

Thank you so much for watching! Most our viewers are 55+, so way to represent the younger generation! Appreciate your support!

@raghureddy1746 3 ай бұрын

Truly commendable that you are already thinking about retirement! Congratulations! You also need to think about what your current tax bracket is, and going all in to Roth may or may not be optimal. Extreme example, if you are in the 32% tax bracket putting everything into Roth may not be desirable. You should also consider tax diversification in the future so that you can withdraw from different sources.

@leos3003 4 ай бұрын

That was incredibly clear and useful

@Theretirementnerds 4 ай бұрын

So glad it was helpful! Thank you for watching!

@justaviewer111 4 ай бұрын

Colorado no longer taxes ANY SS income. It's a recent change.

@GloriaWadzinski 3 ай бұрын

Thanks. I live in Colorado and will verify it, but even if it stayed taxed, the deduction make it $0 for me anyway.

@donniesmith8779 2 ай бұрын

No state taxes, but isn't it still taxed on the federal income taxes if you exceed the amount levels?

@justaviewer111 2 ай бұрын

I guess in MY case it wouldn't be but I do need to correct my statement --- age 65 and above none of your SS is subject to CO state income tax. So if you take early SS, you are still subject to state income tax on some or all of it until you reach 65.

@rongendron8705 Ай бұрын

That's only the state tax & not the Federal tax!

@godschild2-yd3jy Ай бұрын

@@GloriaWadzinski It is taxed by the federal government if over $25,000 for singles and $32,000 for couples in all states.

@michaelchizhik1210 4 ай бұрын

It was fantastic presentation thanks a lot !!!!!!!!!!!!!!!!!!!!!!!!

@Theretirementnerds 4 ай бұрын

So glad it was helpful! Thank you!!

@YCHuen-ed4sk 2 ай бұрын

yes, subscribed. Great video.

@Theretirementnerds 2 ай бұрын

Thank you!

@katherts 4 ай бұрын

Very informative! Thank you🥰

@Theretirementnerds 4 ай бұрын

So glad it was helpful!

@Hbd2002 2 ай бұрын

Wow, why haven’t they adjusted the threshold since 1984? That’s absolutely ridiculous.

@Theretirementnerds 2 ай бұрын

It is pretty wild, isn't it?

@SandfordSmythe 2 ай бұрын

This is unexplainable.

@steveschultz300 28 күн бұрын

Because it's hidden. Meaning, the amount isn't seen or well known amongst the hoi poli and they aren't clamoring for an adjustment.

@eikoGoldstein 4 күн бұрын

The government gives you the COLA increase(which you can see). Then it takes it away at tax time(which you don't see). In fact, the taxable ss amount is part of your Modified Adjusted Gross Income. It is compared to the IRMAA thresholds and may subject you to additional IRMAA penalties. This decreases your monthly net ss benefit.

@jodiecox4353 4 ай бұрын

Excellent information!

@Theretirementnerds 4 ай бұрын

Thank you Jodie!

@guzzi95 3 ай бұрын

Thank you so much!

@Theretirementnerds 3 ай бұрын

Thank you for watching!

@tomm7505 4 ай бұрын

Great video as usual, Erik. I used your original video about SS taxes to calculate both my sister's taxable SS and my own (joint return) for 2023. With the help of your video I estimated her taxes for 2023 and when I actually did her taxes, I was within $2 of the final amount of her refund. For my own (a joint return) I was within $5 of our final amount owed/refunded after I did the taxes. (I'm in Texas so we have no state income tax to worry about.). Again, thanks for much for your helpful videos. I'll also be downloading the spreadsheet that you created. Let me know if you ever get licensed in Texas so in case I change my Medicare supplement, I can use your company.

@Theretirementnerds 4 ай бұрын

Thank you Tom! Yeah, this spreadsheet will be much easier :) I'll definitely let you know if I get licensed there. Not in the cards yet, but never outside the realm of possibilities. Appreciate your support. Means a lot!

@12397bmw 4 ай бұрын

Thank you so much sir you’ve really helped me, I’m 27 yet I’m on ssdi and they aren’t sure if I’ll ever be able to work but I want to should my medication go down in price. I just wanted to make sure that I 100% understood how this could affect me, you’ve got a new subscriber sir.

@Theretirementnerds 4 ай бұрын

So glad this was helpful! Thank you for subscribing and we hope to keep putting out useful videos for you!

@David-cv3bp 3 ай бұрын

If you can read, type like you are doing, then you should be able to work. IMHO.

@Diego-fb5fq 3 ай бұрын

I think you've got it right and it's good to know what's happening behind the software calculations on these inputs. That 35% add-on is double taxation by any definition and should be abolished, if not the whole thing.

@eduardooramaeddie4006 4 ай бұрын

Thank you for the important information 🇺🇸🇵🇷🌎✌️

@yannip2083 3 ай бұрын

When the SS tax elimination (You Earn It, You Keep It) is effective, does that mean if you start collecting SS at 70 and continue working full-time, 85% of your SS will not be added to your full-time pay and taxed by IRS?

@katec4096 4 ай бұрын

This is so bad. Not only the tax that is taken away, IRMAA gets triggered based on this provisional income. Thank you for this informative video.

@Theretirementnerds 4 ай бұрын

Thank you for watching!

@Satjr35031 4 ай бұрын

You need a lot of provisional income to trigger IRMMA

@edgaracevedo9658 4 ай бұрын

what about if your income is a defined company benefit plan like 40K a year?

@jeffsaraiva7099 4 ай бұрын

Very instructional video Eric!! How about income from real estate rentals when figuring social security income taxes??

@Theretirementnerds 4 ай бұрын

Hi Jeff! Goes into the AGI number on the chart 🙂

@stephendibari5010 4 ай бұрын

Excellent description of how SS income is taxed. I’ll be 60 in 2 months and I plan on retiring at 64 years 8 months old from Dept. Of Defense with 36 years and 6 months of service. In today’s dollars my projected SS income is projected to be approximately $2750/month in December 2028. I was told by a coworker that if I start collecting at 62 and continue to work full-time until I officially retire SS will repay me back for the SS money lost from 62 until I retire at 64 years 8 months. I don’t believe this, it sounds too good to be true. BY the way New sub here

@Theretirementnerds 4 ай бұрын

Hi Stephen, thank you for subscribing and watching :) Yeah, so if you take SS before your Full Retirement Age and you continue working, there are implications there. They will reduce your SS payments and take the dollar reductions and put them on the tail end once you reach your Full Retirement Age. We have a deeper dive into that specific question in this video starting at about the 1:07:30 mark: kzfaq.info/get/bejne/gb52pKqjxp_VeH0.html

@stephendibari5010 4 ай бұрын

@@Theretirementnerdsyes I watched that video after this one. Thanks. My next question is do I get a COLA every year starting the following year when I turn 63 ? And on the tail end when I get paid back do I get the money added on a monthly basis or is it a lump sum ?

@dormandavis2767 Ай бұрын

Both my government pensions are 60.700. SSN is going to be taxed so high what’s the advantage to getting it

@frosty3693 4 ай бұрын

North Carolina income tax uses your federal 1040 form to calculate your tax.

@PB-nk4ws 4 ай бұрын

I'm confused by the AGI amounts. If a married couple had $60,000 in income, and their standard deduction is about $30,000 for a couple over age 65, shouldn't their AGI be $30,000? Otherwise it would be gross income, not "adjusted" right? Please help me understand and thanks for videos.

@S.L.S-407 2 ай бұрын

I retired ten years ago and only receive what the government gives me.I have no other income. I have not paid a dime in taxes since I retired. Welcome to Canada.

@spamkoerkel Ай бұрын

If I'm understanding this correctly, my maximum provisional income has to be under 32,000 joint or 25,000 single to avoid any tax on SS. Using made up number for ease of understanding, if our combined SS benefit is 25,000, our provisional income has to be under 19,500. This means our total income for married can be 19,500 + 29,200 (married standard deduction 2024) + 3,100 ( additional deduction for 65 married) = 51,800. Is this correct? Am I understanding this?

@djbaar3301 Ай бұрын

This is so frustrating and hard to comprehend how what was a "pension fund" moved to "general fund" and then taxed...!!!

@shadowfilm7980 26 күн бұрын

It’s really insane/unfair how we get taxed for our SS after paying the income taxes in the past when we were working! Double taxed!

@ebuck6583 2 ай бұрын

How about paying in for years and not ever getting one red scent! I was a state employee for 30 years and screwed out of every penny of social security because of the GPO and WEP! REPEAL THEM NOW!!!

@jokinboken 4 ай бұрын

Treating the Thresholds as progressive brackets results in the same totals. For the high earner with $94,000 of provisional income: Dollars below threshold 1: 0% x $32k = $0 Dollars within threshold 1: 50% x $12K = $6,000 Dollars above threshold 2: 85% x $50K = $42,500 Total: $48,500 of the Soc Sec benefit is taxable which, as you point out, exceeds the total benefit! 🙃

@captsorghum 2 ай бұрын

But the taxable amount is the lesser of your $48,500 and the $40,800 from calculation 2. So 'only' $40,800 of the benefit is taxable.

@g.t.richardson6311 4 ай бұрын

I don’t even worry about this, nothing I can do, ours will be 85% taxed our entire life. Pensions, interest, dividends, etc way over

@larrydemonte2218 3 ай бұрын

I’m 68 and at 65 I started taking my Social Security, but I couldn’t make more than 18,000 a year, so if I made $36,000 by going back to work, I would have to give them a dollar for every dollar I went over which means I have to give them back 18,000 so I had to wait till I was 66 and nine months to be able to make over 18,000 a year, so I was handcuffed that I couldn’t earn more money, so now that I am able to work, I still pay for Social Security out of my withholding taxes, ain’t that a kick in the head and my Social Security is taxable income at the end of the year. It’s a travesty.

@ivgondef4408 4 ай бұрын

After you come up with the final taxable dollar amount using your calculator are you still granted the married filing jointly standard deduction??

@Theretirementnerds 4 ай бұрын

Yes, correct. This video goes over the implications of finding your SS number and how to use it: kzfaq.info/get/bejne/kMuklamVqtfNYnU.html

@jamesmorrow4991 3 ай бұрын

Is disability treated the same as social security as far as taxes are concerned? Thank you for your time. I enjoy your videos.

@Theretirementnerds 3 ай бұрын

Yes, it is treated the same, unfortunately. Thank you for watching!!

@keithFollert 2 ай бұрын

Looking for the calculator. How to download it for taxable income with brackets

@Theretirementnerds 2 ай бұрын

Here's where you can get it: theretirementnerds.com/social-security-worksheet/

@Justme-nz4ib 4 ай бұрын

Thank you for the video, very-very helpful! My question still is why Tax Exempt Income is part of provisional income?

@Theretirementnerds 4 ай бұрын

Great question. Tax exempt income isn't taxed in this case, but it influences how much of your SS is taxable. Will need to ask those who made the tax rules why they did this. Lots of creative ways to make sure tax is paid...

@captsorghum 4 ай бұрын

Because tax exempt bonds are mostly owned by wealthier people, and they wanted to soak the rich.

@zemelya1980 3 ай бұрын

What about Medicare payments they will take from Social Security check? Does it work like with regular paycheck, when your health insurance payments are not taxable?

@Theretirementnerds 3 ай бұрын

Medicare Part B premiums do not reduce your taxable income, unfortunately :(

@Stilllookingood58 4 ай бұрын

Thanks Erik. I will email you with my question.

@Theretirementnerds 4 ай бұрын

Sounds good!!

@TonyCossey1 3 ай бұрын

Is my VA disability compensation calculated in any way to determine how much of my social security retirement will be taxed?

@Theretirementnerds 3 ай бұрын

VA disability dollars are not used in this calculation 🙂

@CandycaneBeyond 4 ай бұрын

Would it be smarter to transfer the 401k before I retire (gradually) to a Roth IRA, so money I pull out will not be taxed OR counted as income?

@Theretirementnerds 4 ай бұрын

This video goes over that in more detail: kzfaq.info/get/bejne/kMuklamVqtfNYnU.html

@user-bd5nh5eb4b Ай бұрын

I kno you are busy, but can I still claim a personal deduction when I file after retirement?

@Theretirementnerds Ай бұрын

Yes, if you file taxes you still do deductions into retirement.

@tinalippincott9823 4 ай бұрын

Thank you for a clear explanation of this confusing subject. Perhaps I am missing something, but, when one starts Medicare B at or after age 65, Medicare B premiums are automatically taken from SSI recipient's monthly check once SSI benefits are begun. Since these premiums are mandatory, why are the premium payments included in taxable SSI amount? I hope my question makes sense. Thanks, Erik!

@Theretirementnerds 4 ай бұрын

Hi Tina, I think I understand what you're asking. Unfortunately, no. Medicare premiums taken out of SS do not reduce the SS taxability portion. I don't have a good answer as to why though :(

@tinalippincott9823 4 ай бұрын

Thanks, seem like so much re SS and Medicare has little foundation in sense or logic. @@Theretirementnerds

@natashab8069 2 ай бұрын

Medicare B payments are not mandatory, because signing up for Part B is not mandatory. Your choice.

@hobofrog6416 4 ай бұрын

Now I get why they are taxing me more on pension money! The calculator is for 2024 tax year and does not change deduction between joint and single. or take into consideration under 65? Maybe it's my old version of excel?

@Theretirementnerds 4 ай бұрын

Hello! Those are customizable, manual entry fields. There are too many different variables and scenarios, especially those who itemize taxes, so type in your deduction and it'll work. Single vs Joint changes the threshold path. This means the spreadsheet will work for 2023 taxes and 2024 and into the future assuming they continue with this method. Hope that helps!

@mikcall54 2 ай бұрын

It is not taxable if it's your only income.

@isaacjordan3848 4 ай бұрын

Who determines if calculation 1 or 2 used? IRS? CPA?

@Theretirementnerds 4 ай бұрын

Whichever ends up being a lower amount to you is the one used.

@philip5899 2 ай бұрын

So in scenario 2, you’d pay zero tax after standard deduction, right ?

@Theretirementnerds 2 ай бұрын

Correct! Take the number, subtract the deduction

@GloriaWadzinski 3 ай бұрын

If I am married but filing individually, can i use the "single" thresholds?

@Theretirementnerds 3 ай бұрын

Yes :) Those thresholds are more about filing status that marital status. Thank you for pointing that out!

@Hbd2002 2 ай бұрын

Is there an online calculator like the one you’re using anywhere?

@Theretirementnerds 2 ай бұрын

There is a link to the spreadsheet we used in the description of this video. Any tax software will do this for you as well. Doesn't always break out how it's working like the spreadsheet does. Just kicks out the final number.

@chrislindsay3104 2 ай бұрын

Does the amount the government withholds for IRMA be included in my Social Security income for tax purposes?

@Theretirementnerds 2 ай бұрын

The amount withheld does not decrease the income used to determine your SS taxability, if that makes sense. Medicare premiums and IRMAA, let's say total $3,000 and your income is $130,000. That $3,000 does not reduce your $130,000 down to $127,000 for the SS taxability calculation.

@chrislindsay3104 2 ай бұрын

@@Theretirementnerds Thanks! I didn't know how to properly word the question but you got it!

@Theretirementnerds 2 ай бұрын

@@chrislindsay3104 happy to help! You worded it great 🙂

@underthetornado 3 ай бұрын

No tax

@johnr5110 4 ай бұрын

Great video.. Where is the link to the software?

@Theretirementnerds 4 ай бұрын

Thank you! It is in the description of this video. Happy to email it to you as well if you want. My email is erik@90daysfromretirement.com

@verat2689 4 ай бұрын

It was a good surprise for me to find your site. Thank you for the very detailed explanation of the complicated subject. The year 2023 is the first when my husband and I have the only SSA benefit income that is around 62K. It seems that we are under 0% of tax pay. Can you please suggest should we still file the tax return?

@Theretirementnerds 4 ай бұрын

So glad you found us! If you have no other credits, deductions, income, or anything else, technically, you don't need to. Many of our clients do, just so they have a record and the prep/filing would be free through the IRS' new tax prep software.

@tomellis01 4 ай бұрын

I have a tax-exempt pension. Does that count as provisional income?

@Theretirementnerds 4 ай бұрын

Tough to say. It is most likely not, however, without seeing the tax return, we wouldn't know on that one. Some are... some aren't...

@ritaharringtonkent270 4 ай бұрын

How do I find the calculator referenced?

@Theretirementnerds 4 ай бұрын

A link to it is in the description of that video. My email is erik@90daysfromretirement.com as well if you want to email me and I can send it

@HiPoint-ql3rs 3 ай бұрын

So only half of your SS benefits are counted as taxable income? Am I getting that right?

@Theretirementnerds 3 ай бұрын

Half of your Social Security is counted towards your provisional income. Provisional income is then used to calculate how much of your SS benefits are taxable.

@AngieWy 3 ай бұрын

I work in Finance and I am so lost. I'll just wait and see what I'm left with. Everything about our Gov't., taxes, social security is confusing - probably intentionally. Signing up for Medicare was a nightmare.

@OShackHennessy 2 ай бұрын

You work in finance and you can’t grasp this? It’s not that difficult.

@AngieWy 2 ай бұрын

@@OShackHennessy Lol, maybe not for you.

@OShackHennessy 2 ай бұрын

@@jaguarreal9116 In this scenario we have 40, 000 taxable SS + 60,000 taxable other income = 100,000 total taxable income. You would then subtract the standard deduction from that say the current 29,200 for married filing jointly. Your taxable income then becomes $70,800 which puts you in the 12% bracket. The tax exempt income (Roth IRA) is not added into this equation because there is no tax). This whole formula he presented is only to determine the taxable portion of your SS it is not meant to calculate taxes on your actual income if that makes sense. This formula is fun to do but it's much easier to get this from a calculator, search "Social Security taxable benefit calculator" and you'll find something that will do all this for you. Then add that number to all of your other income you don't need to calculate provisional incomes and test it like he does here if you don't want to.

@OShackHennessy 2 ай бұрын

@@jaguarreal9116 In this scenario we have 40, 000 taxable SS + 60,000 taxable other income (which I assume is a 401K) = 100,000 total taxable income. You would then subtract the standard deduction from that say the current year 2024 which is $29,200 for married filing jointly. Your taxable income then becomes 100,000 - 29,200 = $70,800. Your total taxes (12% bracket) would be about $8,035 but could change based on what type of accounts you pull your taxable income from. The tax exempt income (assume Roth IRA) is not added into this equation because there is no tax). This whole formula he presented is only to determine the taxable portion of your SS it is not meant to calculate taxes on your actual income if that makes sense. There are online calculators that do what he showed for you. Disclaimer: I am not an accountant nor do I work in the financial sector I just like learning things and I'm nowhere near retirement. If anyone has a correction regarding my calculations please advise.

@OShackHennessy 2 ай бұрын

@@jaguarreal9116 60+40=100, 100 minus standard deduction for married filing jointly is 100-29= ~71. This puts them in the 12% tax bracket on $71k which is about $8k total taxes due.

@Rooster_Crows 4 ай бұрын

My friend’s wife still works $45k before tax, and he will collect full social security benefits this year. Should he wait until his wife stops working? He told me that his SS benefits will be at $1895.

@Theretirementnerds 4 ай бұрын

That's definitely a more detailed answer than we'd be able to fit in a KZfaq comment. More than happy to take a look at their situation if you want to pass along our information. My email is erik@90daysfromretirement.com There are so many moving parts to this. We have a long-form video here that goes into when to take Social Security benefits in more detail: kzfaq.info/get/bejne/gb52pKqjxp_VeH0.html

@bikeny 4 ай бұрын

With your 3rd scenario (high income couple), maybe I am confusing myself with other calculations that have thresholds, but I would have though that it would be just 50% of the $12,000 (the diff between the 2 thresholds) and then 35% of the amount over the $44,000 (in that case the $50,000). But you are indicating it's actually 50% of everything over the $32,000 and then the 35% over $44,000. Yikes. I saw that's when the straight 85% comes into play. I'm gonna download the spreadsheet and play with the numbers. Thanks.

@Theretirementnerds 4 ай бұрын

Definitely download it and mess around. Thank you so much for watching!

@captsorghum 4 ай бұрын

If you calculate it your first way, it should be 50% of the $12,000, plus 85% of anything over $44,000 (until 85% of your full benefit is taxed).

@OShackHennessy 2 ай бұрын

@@captsorghum this 👍

@ttlcorp 6 күн бұрын

I thought I’d you take from your 401k it won’t impact SS taxes. If you “earn” income it would. Is this not correct? Your example says otherwise.

@user-nq5ej2du1x 2 ай бұрын

And soon the veterans will be taxed.

@masterlee4370 4 ай бұрын

I haven't started collecting yet as I am still working at 65 and 4 months. Looking at January 2024 now. 100% sure I am starting then. It's so sad that they have not increased these amounts of 32k and 44k in 40 years. My wife is 5 years younger than me and makes good money as a nurse. Looks like that will hurt me tax wise when I start collecting. Can't believe people watch and do not subscribe. They are getting such valuable information at no cost. It's a no brainer to me. I would subscribe twice if I could. Now I am going watch the video with Zach.

@Theretirementnerds 4 ай бұрын

I think you'll LOVE the video with Zacc 🙂

@GloriaWadzinski 3 ай бұрын

Can't you file as "married filing single" and use the single rate for you? I don't know.

@Frankpagain 4 ай бұрын

Attempted to get the spreadsheet twice and still no email to download.

@Theretirementnerds 4 ай бұрын

Hi Frank, it likely went to your spam or junk folder. Want to send me an email and I'll send it to you? erik@90daysfromretirement.com

@Medmann48 Ай бұрын

We need to STOP taxing Social Security benefits period!

@fctryoffetsh39 Ай бұрын

So they keep upping the tax and now tax it more knowing you have to get and live longer and you'll never get it all

@timmcdonald9856 2 ай бұрын

So, if you have 48000 in SS income as a couple, and 10000 in a state pension, and draw 15000 from 401K annually, then it seems you will owe about 200 in taxes after the standard deductions? That does not seem terribly high? Have I done the calculations right?

@Satjr35031 2 ай бұрын

Probably $0 tax next year when you file if as a couple 65 or older. Standard deduction next year is over $33,000

@user-ve4ig6pw1s 17 күн бұрын

What taxes? I've NEVER paid income tax on my Social Security, because it's my sole income and my income is below the federal poverty level.

@mainerin_texas-gordon-9598 4 ай бұрын

Say we have everything in a Roth. No pre-tax. No Debt. Yearly income from Social Security is 20K more than you need. No taxes on Social Security at this amount, married filing joint. What do you do with the excess cash in retirement? Where is the best place to invest without adding taxes to Social Security. Not working, no income other than Social Security.

@Satjr35031 4 ай бұрын

You could have $40,000 in SS and another $20,000 in income still no Federal tax.

@jaguarreal9116 2 ай бұрын

Where does standard deduction come in. Say the Las example, 94k provisional, 48k ss income. Supposedly 40k of ss is taxable. But there is a standard deduction.

@Theretirementnerds 2 ай бұрын

Correct. The deductions, whether standard or itemized, come off that. This video goes more into application and strategy: kzfaq.info/get/bejne/kMuklamVqtfNYnU.html

@angelachapman4415 2 ай бұрын

I don't mind social security being taxed on principle, but I do think the income threshold you can have before getting taxed on it should be a little higher. I feel like it should be at least 60k or something of other income before social security is taxed. Overall it's a safety net program and if you don't really need that safety net, then taxing that social security makes sense. As an accountant I do see retirees that have a very high AGI and don't even need this social security money, so I wouldn't boo hoo over their social security being taxed.

@threeftr3349 4 ай бұрын

Question....if there is a scenario of someone just having SS income, (no other income sources) but their SS lets say is $88,000(combined) for a couple. Half of that is $44,000. Does this couple have to pay taxes on 85% of their SS? Is there a scenario where a couple combined SS is taxed by itself?(no other income)

@Theretirementnerds 4 ай бұрын

Hi there, that chart you can download for free will show this for you. In that instance, 7% of SS is taxable, which is $6,000. However, the standard deduction wipes that out and you would have $0 in income taxes.

@threeftr3349 4 ай бұрын

@@Theretirementnerds thank you

@jessiemartinfostersr.6067 4 ай бұрын

BE WARE , 24.000 IS THE LIMIT YOU CAN MAKE BEFORE YOU PAY ANY TAXES . IF YOU ARE A SINGLE PERSON ..

@Theretirementnerds 4 ай бұрын

Thank you for watching! $25,000 in Provisional Income is the first threshold number for a single person :) Be sure to download the spreadsheet and mess with it a bit

@THEL0NEARRANGER 2 ай бұрын

You have FORGOTTEN to figure in YOUR Medical expenses. Old people have a lot of Medical expenses. It is easy to have well over $100,000 a year and PAY .... NO INCOME tax at all.

@vzzmhx 2 ай бұрын

It's pretty simple==> live poor and pay fewer taxes. Live RICH and bend-over.

@keithwhite8109 27 күн бұрын

Soon, there is no federal tax on SSi

@Satjr35031 14 сағат бұрын

There has never been a tax on SSI

@jamesvengren5316 27 күн бұрын

That’s like unemployment you lost your job they give you 16 weeks unemployment but wait we tax that to are you kidding I’m not working

@gilllawson2214 Ай бұрын

I only worked 28 years. How bad is the 7 years of no work will hurt my monthly payment

@shadowfilm7980 26 күн бұрын

If you move overseas then it won’t be taxed. It will probably fall under the current limit of around $110,000 per year. Anything over that is taxable. I know because I lived overseas.

@jamesvengren5316 27 күн бұрын

How can you tax taxed money

@Theretirementnerds 27 күн бұрын

That is an excellent question...

@ph5915 4 ай бұрын

Taxes in the US is really squirrelly and convoluted, it has to be on purpose. I just had my taxes done (my 1st year with IRA Distributions) and I had carefully followed the IRS and my state tax brackets during the year, and was shocked, kinda, at the refunds I am getting back...No, they weren't astronomical, but they were a lot more than I'd expected, and much more when I was still working and had the mortgage interest deduction, etc., it's that AGI that's hard to know ahead of time...LOL. I've heard that some European countries have their tax system totally automated and they send you a letter with how much taxes you paid the previous year, and amount owed back or you still owe, and you can accept their findings or appeal...Much simpler for the majority of people...Anyway, I probably will not file for SS until 70.

@Theretirementnerds 4 ай бұрын

Part of me definitely wishes everything was automated... a big part of me.

@ph5915 4 ай бұрын

@@Theretirementnerds LOL, exactly. I mean, for most people, the gov't already knows how much you make, whether you have investments, mortgages, etc. I asked Fidelity about this HSA Form 5498 and how was I to prove I had contributed if the form isn't available until May 17? They said just note your contribution, when the 5498 form is pushed, the gov't will know and if there's a discrepancy, they'll reach out to you! LOL, so right there - they already know or will know the same time I will?! 🤣The tax preparing industrial complex I suppose.

@Theretirementnerds 4 ай бұрын

@@ph5915 There are some funny videos about people explaining the tax process right now and how illogical it is. Maybe one day it'll all get figured out. But then... how will we be able to make helpful KZfaq videos?! If it was all easy, our channel becomes useless :)

@davidgavney6711 3 ай бұрын

Why have I seen another calculation (or test), where they take 50% of the total social security benefit, then added to 85% of provisional income over the second threshold? In fact, in that same place, that is the only other time I see mention of the 35%. Usually, I just see the thresholds and 50% and 85% mentioned. Granted I just started looking at this today. Update: I found the IRS Worksheet 1 and examples where this is done (Pub 915). The reason why 35% for the second threshold is used is because 50% is used for the entire amount subtracting the lower threshold, so you only need 35% more for the upper threshold to make 85%. That explains the two calculations where it's either using the two thresholds or just using 85% over the second. But, I still haven't found the one in my first sentence.

@randolphh8005 3 ай бұрын

There is an actual worksheet published by the IRS to do these calculations. That worksheet is what should be used to get your number. These video calculations appear accurate and are easier to visualize, but I would just do the worksheet to be sure.

@davidgavney6711 3 ай бұрын

@@randolphh8005 Thanks! I did find it in Pub 915 as mentioned above and in the 1040 general instructions, too, called the social security benefits worksheet. I even created a spreadsheet to model their calculations. Otherwise, thanks for the thorough explanation!

@brankoradanovic9694 3 ай бұрын

The question is who is the one who introduce the bill to Social Security should be taxed please answer to us this question

@SandfordSmythe 3 ай бұрын

It was Bipartisan

@brankoradanovic9694 3 ай бұрын

@@SandfordSmythe Sorry Sir! It was Biden who introduced the Bill 1980s he’s a jerk:Find out for your self:That guy is a shyster: do you remember the he promised $200 across the board for every social security recipient? Where is the money?

@SandfordSmythe 3 ай бұрын

@brankoradanovic9694 The Greenspan Commission was appointed by Congress and Presdent. It was a bipartisan committee formed to solve the problem of too little income for SS. In its 1983 report, it included taxation. It was expected that all would sign off on it.

@brankoradanovic9694 3 ай бұрын

@@SandfordSmythe If you dig in to it the Biden was the one who was a introducing the bill :

@SandfordSmythe 2 ай бұрын

@brankoradanovic9694 It was a bipartisan compromise bill that all was expected to sign. I don't care who introduced it if he did. It's irrelevant except for throwing mud.

@pointreyes4272 4 ай бұрын

Here how it works for us: My spouse and I make $38,000 per year on Social Security and pay zero in federal and state taxes.

@Satjr35031 4 ай бұрын

You could make $80,000 in SS if that’s your only income Still $0 Federal tax.

@pointreyes4272 4 ай бұрын

@@Satjr35031 here's your answer www.ssa.gov/benefits/retirement/planner/taxes.html

@pointreyes4272 4 ай бұрын

@@Satjr35031 Nope $80k for a married couple filing jointly would be at least partially taxable. Here''s the worksheet: www.irs.gov/pub/irs-pdf/p915.pdf

@user-wf5fx7pm8o Ай бұрын

surprise there is no law saying you have to pay tax on your social security,irs has been shut down now for 2 years people,give me a break social security

@mikimikemike1 Ай бұрын

interesting

@Theretirementnerds Ай бұрын

Thank you so much for watching!

@jamesmorrow4991 2 ай бұрын

I'm sorry to bother you again. I would calculate the taxes on my disability the same as social security?

@BillGreenAZ Ай бұрын

For those of you who are watching this video who have not subscribed, HIT THE SUBSCRIBE BUTTON! This guy has some great videos on Social Security. (I am not being compensated in any way for this statement.)

@007dubbleR 4 ай бұрын

Leave it up to the government to make it so complicated that few understand it. Federal tax started out at a simple one percent

@SandfordSmythe 3 ай бұрын

Obviously, the demographics changed the 1%

@nikto-ky4kx Ай бұрын

A tax on a tax .

@Theretirementnerds Ай бұрын

Yep :(

@spicycopper2436 3 ай бұрын

When you said Social Security wasn't taxable until 1984, I had to see who was President. It was Ronald Reagan.

@SandfordSmythe 2 ай бұрын

Bipartisan

@joeyoungs8426 2 ай бұрын

And again the the taxable threshold was raised in ‘93 and also bipartisan.

@davidgoodman3545 2 ай бұрын

Yea, but he championed it, the loudest voice in the room. Not to mention all the other things his 2 terms did, along with the moral majority . i even voted for him the 1st time. Lol

@trarock24 4 ай бұрын

Its bs that a group of politicians in 1984 made this decision when these same individuals do not rely upon SS for a large portion of their income…

@Satjr35031 4 ай бұрын

That is why it was implemented because around 8-10 % did not have to rely on SS That is why they were taxed

@dmburtt 4 ай бұрын

That may have been true in 1984, but a lot more than that are having to pay taxes on their SS now because the tax charts haven't been adjusted since 1984. I'm single and I end up paying anywhere between 50-85 % of my SS ends up paying tax on it because of my IRA distributions puts me over.@@Satjr35031

@TheDanEdwards 4 ай бұрын

Ronald Reagan wanted tax cuts for his rich friends, and he screwed the rest of the Americans.

@Hbd2002 2 ай бұрын

Darn, I thought it was only taxed before you were your full retirement age