Category - Social Security

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Taxability of Social Security
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Adjusting Withholding Saved 44% of the Tax Bill
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Substantial Earnings Years of Credit
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Filing for Social Security Survivor Benefit alone, preserving Retirement for later
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Delayed Retirement Credits – When are These Applied?

Taxability of Social Security

In a comment on the article last week (Adjusting Withholding Saved 44% of the Tax Bill), a question came up about the taxability of Social Security benefits. It can be complicated, hopefully this explanation will help you understand taxability of Social Security a bit better.

Social Security is taxable at three different levels, based upon how much other income you have and your income tax filing status.

First, you need to calculate your Provisional Income – which is 50% of your household Social Security benefits plus all of your other taxable income, plus any tax-free income.

Next, there …

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Adjusting Withholding Saved 44% of the Tax Bill

adjusting withholdingAdjusting withholding can sometimes produce a surprise.

While preparing a client’s tax return the other day, the result was that he had nearly a $5,000 refund coming. Often when we have a large refund coming we think “Nice! It’s like an unexpected gift!” But as you’ll see below, this is not a gift – it’s actually costing quite a lot in taxes in this particular case.

Naturally, as in most cases like this, I reviewed his income sources and withholding to see if there was anything obvious that we could change for him that would make his withholding more efficient.…

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Substantial Earnings Years of Credit

How does the substantial earnings years of credit work for Windfall Elimination Provision?

In this article I wanted to expand on a question that came in via the comments recently, because it addresses a theme I’ve seen often:

I have several years where I was just under the substantial earnings cutoff and 25 that are way over. Do you get partial credit for the years that did not reach the substantial floor?

Overview of Substantial Earnings

When your Social Security benefits are subject to the Windfall Elimination Provision (WEP), there is a way to reduce and possibly eliminate the effect …

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Filing for Social Security Survivor Benefit alone, preserving Retirement for later

After all of the changes that have been put in place for Social Security benefits in the past year, there is still one situation that allows for some planning. Knowing about this situation can help if you happen to be in the right circumstances.

If your spouse has passed away and you are due a Survivor Benefit, there may be a strategy for you to maximize benefits. This is because, of all types of Social Security benefits, the Survivor Benefit may still be filed for separately from the Retirement benefit based on your own record.

Why would you want to …

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Delayed Retirement Credits – When are These Applied?

If you delay filing for your Social Security benefit, for each month that you delay you will earn delayed retirement credits. The increase for each month of delayed retirement credit is 2/3% (0.667%) for every month. This equates to 8% in delayed retirement credits for every year of delay. But when are these credits applied to your benefit?

As with so many Social Security-related calculations, timing is everything. With delayed retirement credits, the key is exactly when you stop delaying and start collecting benefits.

Starting Benefits Before Age 70

When you’re delaying benefits past your full retirement age (FRA), you …

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