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  • Assuming you are receiving social security benefits, taxes paid will depend on if you have reached your full retirement age according to the social security administration.

    Once you have reached full retirement age (FRA), which is unique to your personal birthday, and can be found at http://www.ssa.gov/pubs/ageincrease.htm, and have earned substantial income, not including your social security benefits, your social security benefits can be taxed up to 85%. The amount to be taxed depends on if you file your federal tax as an individual or married filing jointly and the amount of your earnings and social security income. If you file individually and your combined income is less than $25,000 you will not pay taxes on your social security benefits; married filing jointly with a combined income less than $32,000 no taxes will be due for the benefits. You can find more information on this subject at http://www.ssa.gov/planners/taxes.htm.

    If you have not reached your FRA and are receiving social security benefits along with earnings from work, the benefits may be reduced. If you are younger than your FRA benefits will be reduced $1 for every $2 earned over the annual limit ($15,120 for 2013). In the calendar year of your FRA, your benefits will be reduced $1 for every $3 earned above the annual limit, which is $40,080 for 2013, until the month of your birthday. Once you have reached your FRA the benefits will not be reduced due to additional earnings. The social security administration provides greater detail into the subject at http://www.ssa.gov/pubs/10077.html#a0=4.

    This answer is provided as general information only from students pursuing a Master’s degree in Personal Financial Planning from Texas Tech University. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or Certified Financial Planner TM as to your unique financial situation.

  • Login to rate this answer:   Answered on 3/18/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.