spent the last 40 years fattening the U.S. Treasury thanks
to those dang FICA
taxes that came out of every paycheck. Now you're retiring
and it's time to get your tax money back, free and clear,
Well, maybe; maybe not.
You certainly are entitled
to the Social Security benefits your payroll taxes went toward.
But the IRS also could take a bite out of those federal retirement
Generally, if Social
Security benefits are your only income, your benefits are
not taxable. From the IRS's standpoint, Social Security benefits
include monthly survivor and disability benefits; supplemental
security income payments are not taxable.
But if you collect Social
Security plus other income, as much as 85 percent of what
Uncle Sam pays you could be subject to tax. To figure out
just how much in taxes your Social Security might cost you,
you'll have to do some calculating using the worksheet found
in your 1040 or 1040A tax package.
If you discover that
you will owe taxes on some of your Social Security benefits,
there are two ways to deal with them. You can make estimated
tax payments on the government check amounts. Or you can
have federal income tax withheld from your benefits by completing
Form W-4V, Voluntary Withholding
Request, and filing it with the Social Security Administration.