Some Social Security benefits taxable
When you retire, some of your Social Security benefits may be taxed.
Generally, if Social Security benefits are your only income, your benefits are not taxable. But if you collect Social Security plus other income, as much as 85 percent of those government payments 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 tax Form 1040 or 1040A. Or your tax software will automatically figure your tax liability for you.
If you discover that you will have to pay taxes on Social Security benefits, there are two ways to deal with them:
- You can make estimated tax payments to cover what you owe.
- 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.
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