If you receive Social Security benefits, you may have to pay federal income tax on part of your benefits. These tax tips will help you determine if you need to pay taxes on your benefits.
Tag Archive for Social Security Benefits
Social Security – that onerous tax we pay to work in the United States, supposedly for our own retirement but it seems to be more to fund those who are already drawing on it! I have quite a few clients who are on temporary work visas here in the US. They rightfully question whether they will be able repatriate Social Security when they are eligible to draw on it. Or there are those US Citizens who travel after they retire and may even choose to settle abroad or go back to their home country if they had migrated to the USA.
Are You A US Citizen or Not?:
Retirees who are U.S. citizens are entitled to continue receiving benefits for as long as they live outside the United States. However, citizens of other countries who receive Social Security may have some restrictions on how long they can receive benefits while outside Read more
There is a lot to consider when deciding when to take your Social Security, but let’s start off with the basics. Every year you get a statement from Social Security that tells you what your benefit will be when you retire. Full retirement age is currently 66, but forty years from now I assume it will be much higher for me. The statement will tell you the benefit is $20,000 (depending on your earnings history) when you are 66 years old.
But there are choices, so many choices to be made. If you claim Social Security early (before you are 66) you get a smaller amount. If you claim when you are 62 years old, you get 75% of the full amount which would be $15k a year in this case. If you claim at 63 it’s 80%, 64 it’s 87% and at 65 it’s 93% of the full value.
Taking your Social Security early will pay off if you are planning on getting hit by a bus at your 71st birthday party, but if you are planning to live to 100 it probably won’t work out well. Another choice is to claim the Social Security later at 67, 68, 69 or 70 years old. For every year you wait after 66, you get an additional 8%. Meaning if you wait until 70 years old, you get 132% of the full value every year for the rest of your life. $26,400 instead of $20,000 a year is a big difference and over the long haul you will come out ahead. Read more
- A Modest Proposal – Let’s Fix ExtensionsBy John StancilI remember when tax season was pretty much over after April 15. Sure, there were extensions, but for four months and you had to justify an additional two-month grace period. Since the additional […]
- Tax Reform “Revolution” In 1986 But More Needed TodayBy Annette NellenSaturday, October 22, was the 30th anniversary of the Tax Reform Act of 1986 (see 10/18/16 post). My class enjoyed a “Happy anniversary TRA86” cake! TRA86 represented a lot of changes […]
- Free Webinar- Solving The Toughest Tax Provision Audit Challenges – November 4thBy AdvertorialTaxConnections brings you two leading tax experts in tax provision webinar scheduled for November 4th, 2016. Presenters Stephen Day and Nick Frank will discuss what the tax auditors always challenge […]
- IRS Nets $10 Billion From More Than 100,000 Taxpayers In The OVDP ProgramsBy Ronald MariniThe IRS, in news release IR 2016-137, highlighted the accomplishments of its Offshore Voluntary Disclosure Program (OVDP) and encouraged taxpayers with undisclosed offshore accounts to come into […]
- Several New Jurisdictions Sign Transfer Pricing, Automatic Sharing Of Corporate Country-By-Country ReportsBy William ByrnesAs part of continuing efforts to boost transparency by multinational enterprises (MNEs), Brazil, Guernsey, Jersey, the Isle of Man and Latvia signed today the Multilateral Competent Authority […]
- A Modest Proposal – Let’s Fix Extensions