37 states that do not tax Social Security benefits | Personal Finance – Community News
Social Security

37 states that do not tax Social Security benefits | Personal Finance

Individuals with a provisional income of more than $25,000 and married couples with a provisional income of more than $32,000 may be subject to tax on up to 50% of their distributions. Individuals with provisional incomes over $34,000 and married couples with provisional incomes over $44,000 may be subject to tax on up to 85% of their distributions.

But that’s the worst-case scenario. Some people pay taxes on a smaller amount than this, and some manage to avoid distribution taxes entirely.

However, many seniors do pay some Social Security benefits. If you don’t think you can avoid taxes altogether, it’s best to estimate in your retirement plan how much you might owe in taxes and budget for this.

If you are not yet retired, keep an eye out for any rule changes related to Social Security or benefit taxation and update your retirement plan accordingly. Keeping a close eye on these changes will ensure that you aren’t caught off guard by your tax bills when you retire.

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