taxes

8 tax breaks that cost Uncle Sam big money

Social Security, railroad retirement benefits
Social Security, railroad retirement benefits

Retirees whose only income is Social Security or railroad retirement benefits usually don't owe federal taxes. However, the IRS gets a cut when a retiree has other income from, for example, a post-retirement job or investment earnings. Married retirees who file joint returns also must take into account any money earned by either spouse in determining whether any of the federal retirement payments are taxable.

In most cases when a retiree's additional earnings are large enough to attract IRS attention, up to 50 percent of federal benefits generally are taxable. However, in some situations a retiree could find up to 85 percent of Social Security or Railroad Retirement benefits taxed.

Still, plenty of benefit recipients escape taxation. They are expected to account for more than $179 billion in taxes that the U.S. Treasury won't collect between 2013 and 2017.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed 4.25%  0.02 4.27%
15 year fixed 3.23%  0.02 3.21%
5/1 ARM 3.37% --0.00 3.37%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.36%  0.02 4.34%
50K FICO-based HELOC 4.06% --0.00 4.06%
100K FICO-based HELOC 3.91%  0.02 3.93%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.69% --0.00 2.69%
48 month used car loan 2.92% --0.00 2.92%
60 month new car loan 3.18% --0.00 3.18%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.90% --0.00 0.90%
2 Year CD 1.13%  0.04 1.09%
5 Year CD 1.78%  0.02 1.76%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.71%  0.01 15.72%
Cash Back Cards 16.41%  0.01 16.40%
Low Interest Cards 10.86% --0.00 10.86%
 
Next
DAILY TAX TIP NEWSLETTER

Get expert advice during tax season on tax preparation and tips for cutting your tax bill.

advertisement

Connect with us