social security and taxes

[Dznypal]

Im planning on retiring in July of 2017 and collecting SS

I read on the SS website that theres a few times you need to claim SS on your taxes

wouldnt this be double dipping on the goverenment part (although that wouldnt surprise me)

first off is SS taxed when its taken off on your paycheck

so then you have to claim on your taxes and possibily pay taxes on it again

if Im reading it right if filing jointly you pay taxes on half of the SS but its paying taxes twice on the same money

there are income guidelines but our income will be more then the guidelines

please correct me if Im wrong about double paying taxes on the same money

and how the claiming on SS on the income taxes work

thanks so much for any advice you can give me--this is all going to be so new but looking forward to it

 

[Dakota731]

Happens when you die too. You paid taxes on your earnings when you made them and if you leave money to your children, it's taxed again. You are punished for saving and looking toward the future.

 

[scrapquitler]

Im planning on retiring in July of 2017 and collecting SS

I read on the SS website that theres a few times you need to claim SS on your taxes

wouldnt this be double dipping on the goverenment part (although that wouldnt surprise me)

first off is SS taxed when its taken off on your paycheck

so then you have to claim on your taxes and possibily pay taxes on it again

if Im reading it right if filing jointly you pay taxes on half of the SS but its paying taxes twice on the same money

there are income guidelines but our income will be more then the guidelines

please correct me if Im wrong about double paying taxes on the same money

and how the claiming on SS on the income taxes work

thanks so much for any advice you can give me--this is all going to be so new but looking forward to it

You probably should get some guidance from a tax professional, because there are a lot of rules about social security, and your circumstances make a big difference which rules apply to you and which don't.

I believe that if you are under a certain age and still working, that you DO have to claim social security as income and you can be penalized if your earned income from your job is too high. But these things are highly dependent on your age and your income, so consult a professional.

 

[TheDisneyDoll]

i know social security disability claiming it on taxes is optional (depending on some circumstances).

 

[tvguy]

Actually, your social security withholding comes out of your paycheck pre-tax.

 

[georgina]

Agree with scrapquilter, this is not the best place to get tax advice. There are income limits above which you will have to pay tax on your social security income. But you are not paying federal tax twice on the same social security income, only once. I believe you can ask them to withhold some tax from your payment, or receive the whole payment and then pay tax on it.

 

[rickdeni]

Depending on your income you will have to claim up to 75% of your social security. Yes, it hurts

 

[The LK 4]

Actually, your social security withholding comes out of your paycheck pre-tax.

Actually, it doesn't. If you make $100, your SS tax is $100 x 6.2% = $6.20. How is that pre-tax??? Deductions can be pre-tax. Taxes are.....taxes.

 

[SirDuff]

Actually, it doesn't. If you make $100, your SS tax is $100 x 6.2% = $6.20. How is that pre-tax??? Deductions can be pre-tax. Taxes are.....taxes.

ETA - I should check my facts before posting.

 

[Gracie09]

Ss is a tax but you don't pay taxes on the money taken out by ss. As an example say you make $100,000. You pay $1000 in ss. You are then taxed (federal state whatever) on the remaining $99,000. So you don't actually pay taxes on the $1000 ss took out. Obviously all number made up to be nice and round and totally inaccurate in terms of percentages.
Ss is supposed to go into a separate account so to speak and not into the general budget funds.

 

[msmayor]

That is incorrect. Social Security withheld from pay is not a deduction from gross wages in order to determine taxable income.

Its not 'double dipping' when you pay income tax on Social Security. Its not 'your' money that you are collecting when you retire. 'Your' contribution went to someone else at the time it was withheld.

 

[hearingaidmom]

Actually, your social security withholding comes out of your paycheck pre-tax.

This is incorrect.

 

[SirDuff]

That is incorrect. Social Security withheld from pay is not a deduction from gross wages in order to determine taxable income.

Its not 'double dipping' when you pay income tax on Social Security. Its not 'your' money that you are collecting when you retire. 'Your' contribution went to someone else at the time it was withheld.

You're right. Sorry. I just moved to the US and assumed it was a deduction, but looking more closely at my pay stub, only my health insurance premiums are marked as being subtracted before tax withholding is calculated.

tvguy and The LK 4 are still saying different things (though only The LK 4 is right).

 

[manning]

Ss is a tax but you don't pay taxes on the money taken out by ss. As an example say you make $100,000. You pay $1000 in ss. You are then taxed (federal state whatever) on the remaining $99,000. So you don't actually pay taxes on the $1000 ss took out. Obviously all number made up to be nice and round and totally inaccurate in terms of percentages.
Ss is supposed to go into a separate account so to speak and not into the general budget funds.

That's a laugh. The government borrows from SS. They do this to hide the true deficit. It is said the true deficit astronomical.

 

[manning]

Depending on your income you will have to claim up to 75% of your social security. Yes, it hurts

Up to 85%. You are allowed income to a certain amount before taxed. The rub is the Social Security Payments are included in that amount.

 

[tvguy]

This is incorrect.

Okay, lets go over this.
Look at a your W-2.
Box 1 is Wages, Tips and Other Compensation and interestingly it is 7.65% less than Box 3.
Box 3 is Social Security Wages.
Social security withholding is 6.2% and Medicare is 1.45%. 6.2 + 1.45= 7.65%

Okay, I may be slow, but how is that NOT pre-tax income?
Thanks

 

[natfrac]

My husband is on SS Disability and we pay federal tax, but not state tax, on it because I earn too much. At least we get a break at the state level.

 

[SirDuff]

Okay, lets go over this.
Look at a your W-2.
Box 1 is Wages, Tips and Other Compensation and interestingly it is 7.65% less than Box 3.
Box 3 is Social Security Wages.
Social security withholding is 6.2% and Medicare is 1.45%. 6.2 + 1.45= 7.65%

Okay, I may be slow, but how is that NOT pre-tax income?
Thanks

I cannot find anything on the IRS site, but unless H&R Block and various other sites are all wrong, it is you who are wrong (and have a coincidence on your hands).

The difference between boxes 1 and 3 are due to things like 401(k) or 403(b) contributions (since you pay SS tax on these, but not federal income tax). The fact that the difference on your W2 is exactly 7.65% is a coincidence, I'd guess.

From H&R Block:

Box 3: Social Security wages -- The amount of earnings your employer paid you subject to Social Security tax. This doesn’t include tips. This amount might be more than the amount in Box 1 if some income subject to Social Security tax isn’t subject to income tax. Ex: Amounts you contribute to a tax-deferred retirement plan like a 401(k) or a 403(b) plan.

http://www.fool.com/knowledge-cente...termine-federal-taxable-income-from-your.aspx

http://www.hrblock.com/free-tax-tip...1040/Form-W-2.html?action=ga&aid=27035&out=vm

http://www.dailyfinance.com/2014/01/16/w2-form-key-facts-tax-documents/

 

[hearingaidmom]

Okay, lets go over this.
Look at a your W-2.
Box 1 is Wages, Tips and Other Compensation and interestingly it is 7.65% less than Box 3.
Box 3 is Social Security Wages.
Social security withholding is 6.2% and Medicare is 1.45%. 6.2 + 1.45= 7.65%

Okay, I may be slow, but how is that NOT pre-tax income?
Thanks

Your W-2 box one and box three probably are very well different for a myriad of reasons not limited to employee contributions to a qualified retirement plan, but the difference is NOT your (employee) share of social security and Medicare withheld from your pay unless your employer does not know how to calculate payroll. Social security and Medicare withholding are not deducted from gross wages to calculate federal taxable wages. Period.

 

[tvguy]

Your W-2 box one and box three probably are very well different for a myriad of reasons not limited to employee contributions to a qualified retirement plan, but the difference is NOT your (employee) share of social security and Medicare withheld from your pay unless your employer does not know how to calculate payroll. Social security and Medicare withholding are not deducted from gross wages to calculate federal taxable wages. Period.

Thanks. That will be a mystery then, since my 401k gets 15% of my gross pay, not just over 7%.....and I think....again maybe incorrectly, my medical insurance premiums would also be lumped in to make the difference far greater.