Mar 4
Social Security Benefits Are Taxed? Ouch! by Marcia Mantell - ThinkAdvisor
What You Need to Know
- Welcome to Connecting the Dots, the column where Marcia Mantell discusses real-life decisions around Social Security claiming and retirement.
- Retirees often find themselves in a higher tax bracket than they expected.
- The tax implications of Social Security benefits are just one thing that can take new retirees by surprise at tax time.
Aman who had retired at the end of 2020 recently reached out to me. With newfound time on his hands, he decided to try free tax software packages and do his own taxes this year. The surprise? His Social Security benefits pushed him into a higher-than-expected tax bracket. “What’s up with that?” he wanted to know.
The Caller’s Income Situation
“Barry” waited until 70 to get his maximum Social Security benefit. His wife, “Lydia,” was a homemaker. Born in 1952, he was grandfathered into the former “file and suspend” strategy.
