The Sidney Sun-Telegraph - Serving proudly since 1873 as the beautiful Nebraska Panhandle's first newspaper

Don't be surprised by Social Security taxes

 

March 30, 2022 | View PDF



When you apply for your Social Security retirement benefits, you need to think about how much you want withheld for taxes. Many people overlook this issue – only to face an unpleasant surprise at tax time, because Social Security benefits may be added to taxable income.

Using Form W-4V, you can have 7, 10, 12 or 22 percent of your monthly benefit withheld. Your tax advisor can help you choose the appropriate percentage.

And you have other ways to control the taxes due on your benefits. For example, if you meet certain conditions, withdrawals from a Roth IRA will not be taxed, so they won’t increase your taxable income or your Social Security taxes.

Also, the earlier you take Social Security, the lower your monthly payments, and the lower the taxes. Still, taxes shouldn’t determine when you want to start taking payments – instead, consider other factors, such as your life expectancy, your employment situation, your spending needs and the benefits for your spouse.

The more you know about the impact of Social Security benefits on your taxes, the better prepared you’ll be to incorporate these benefits into your retirement income plans.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.Edward Jones, Member SIPC

 

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