🔍Taxes on social security benefits are progressive, meaning the higher your income, the more you pay.
🧮Combined income is calculated by adding adjusted gross income, non-taxable income, and half of social security income.
🔒Minimizing taxes on social security benefits should be a low priority compared to other strategies, like strategic Roth IRA conversions.
How are taxes on social security benefits calculated?
—Taxes on social security benefits are calculated based on your combined income, which includes adjusted gross income, non-taxable income, and half of your social security income.
Can I avoid taxes on social security benefits?
—It is difficult to avoid taxes on social security benefits unless you have no income. The combined income limits are low in relation to most people's retirement income needs.
Should minimizing taxes on social security benefits be a priority in retirement planning?
—Minimizing taxes on social security benefits should be a low priority in retirement planning. Other strategies, such as strategic Roth IRA conversions, can go further in reducing overall tax payments.
Are social security taxes used for general spending?
—Taxes on social security benefits go back into the social security trust, rather than being included in general spending.
What is combined income?
—Combined income is the sum of adjusted gross income, non-taxable income, and half of social security income.
00:00Introduction and overview of the three things to know about taxes on social security benefits.
01:07Explanation of progressive taxation of social security benefits based on income levels.
03:21Calculation of combined income, which determines the taxation of social security benefits.
04:14Importance of minimizing taxes on social security income and alternative strategies to consider.
05:38Conclusion, call to action, and closing remarks.
