Social Security Question

[jlf58]

My wife and I just started collecting SS. I an trying to figure out the tax portion. Is it correct that if we don't have additional income or our combined income out side of SS is $32,000 or less , we don't pay taxes on SS? TIA

 

[Brett]

My wife and I just started collecting SS. I an trying to figure out the tax portion. Is it correct that if we don't have additional income or our combined income out side of SS is $32,000 or less , we don't pay taxes on SS? TIA

I would say yes - you would not pay additional income taxes
(unless you start withdrawing money from your IRA or 401K)

 

[jlf58]

I would say yes - you would not pay additional income taxes
(unless you start withdrawing money from your IRA or 401K)

Is the 401K withdrawal considered income for tax purposes ? If I don't work and withdrawn for 401K say 10K a year, no tax on SS just the withdrawal ?

 

[VacationForever]

The test is total income, not just income outside of SS. 401K withdrawal is counted towards total income. The total would be SS of A + SS of B (spouse) + 401K withdrawal.
For 2025:
Social Security Benefits Taxation:
Social Security benefits themselves are not always taxable, and the amount subject to taxation depends on your combined income.

• No Tax: If your combined income is below $25,000 (single) or $32,000 (married filing jointly), no Social Security benefits are taxed.
  
  
• Partial Tax: If your combined income is between $25,000 and $34,000 (single) or $32,000 and $44,000 (married filing jointly), up to 50% of your benefits may be taxed.
  
  
• Higher Tax: If your combined income is above $34,000 (single) or $44,000 (married filing jointly), up to 85% of your benefits may be taxed

 

[jlf58]

The test is total income, not just income outside of SS. 401K withdrawal is counted towards total income. The total would be SS of A + SS of B (spouse) + 401K withdrawal.
For 2025:
Social Security Benefits Taxation:
Social Security benefits themselves are not always taxable, and the amount subject to taxation depends on your combined income.

• No Tax: If your combined income is below $25,000 (single) or $32,000 (married filing jointly), no Social Security benefits are taxed.
  
  
• Partial Tax: If your combined income is between $25,000 and $34,000 (single) or $32,000 and $44,000 (married filing jointly), up to 50% of your benefits may be taxed.
  
  
• Higher Tax: If your combined income is above $34,000 (single) or $44,000 (married filing jointly), up to 85% of your benefits may be taxed

So our combined SS is $60,000 a year. If I didn't work, I pay interest on that or just the 401K withdrawal ?

 

[VacationForever]

So our combined SS is $60,000 a year. If I didn't work, I pay interest on that or just the 401K withdrawal ?

You pay tax on (up to) 85% of $60K (SS) + 100% of 401K withdrawal. SS is treated as income, don't be confused by the term "income".

 

[jlf58]

You pay tax on 85% of $60K (SS) + 100% of 401K withdrawal. SS is treated as income, don't be confused by the term "income".

So above comment is not correct, If we didn't work and didn't withdraw, I still pay taxes on 85% of the 65k ?

 

[VacationForever]

So above comment is not correct, If we didn't work and didn't withdraw, I still pay taxes on 85% of the 65k ?

Yes, up to 85%. My above comment is correct. Your original post is not.

 

[jlf58]

Yes, up to 85%. My above comment is correct. Your original post is not.

I meant the first person who responded was not correct

 

[Rolltydr]

This only applies to federal income taxes. You probably know this, but many states do not tax 401k withdrawals. You need to check your own state laws. 13 States that don’t tax IRA OR 401k

 

[VacationForever]

This is a pretty good calculator. It shows that only $4K of the $60K of SS is taxable at your income level, after taking into account standard deductions.

Social Security Taxable Benefits Calculator

Free social security taxable benefits Calculator. Use this calculator to estimate how much of your Social Security benefit is subject to income taxes.

www.annuityadvantage.com

 

[jlf58]

This is a pretty good calculator. It shows that only $4K of the $60K of SS is taxable at your income level, after taking into account standard deductions.

Social Security Taxable Benefits Calculator

Free social security taxable benefits Calculator. Use this calculator to estimate how much of your Social Security benefit is subject to income taxes.

www.annuityadvantage.com

I live in Fl so no state tax. I plugged in just 60k SS and it said zero is taxable

 

[VacationForever]

I live in Fl so no state tax. I plugged in just 60k SS and it said zero is taxable

I put in 60K SS and 10K 401k withdrawal and got $4K of SS taxable.

 

[jlf58]

I put in 60K SS and 10K 401k withdrawal and got $4K of SS taxable.

oh, ok, got it , I can live with that LOL

 

[sue1947]

Is the 401K withdrawal considered income for tax purposes ? If I don't work and withdrawn for 401K say 10K a year, no tax on SS just the withdrawal ?

As stated previously, any withdrawals from a regular 401K are considered income. That also applies to a 'regular' IRA but not a Roth 401K or IRA. This is one of the reasons a Roth is preferable to the pre-tax versions. If you rollover from the regular 401k/IRA into a Roth, that is also counted as income.
In addition, it will also impact your insurance premiums if you are on Medicare or Affordable Care. Another instance is some low income property tax programs.
When considering pulling money out of a retirement program, it's a really good idea to run a 'what if' scenario via either calculators or a tax program to sift out any unintended consequences.

 

[Talent312]

Look at IRS Publication 915... Most peep use Worksheet 1.
I copied it into a spreadsheet I use to predict my taxes each year.

 

[easyrider]

I meant the first person who responded was not correct

I think it was based off your first post using $32,000.

Bill

 

[VacationForever]

I think it was based off your first post using $32,000.

Bill

His OP says $32K outside of SS, which is different from your interpretation of SS amount of $32K. $32K outside of SS + SS will definitely result in SS being taxed.

 

[Brett]

His OP says $32K outside of SS, which is different from your interpretation of SS amount of $32K. $32K outside of SS + SS will definitely result in SS being taxed.

yeah, my bad - I didn't see the word "outside" in the original post. An extra $32k definitely affects the taxation of SS
Senior moment ......... 'crowdsourcing' works!

 

[jlf58]

Look at IRS Publication 915... Most peep use Worksheet 1.
I copied it into a spreadsheet I use to predict my taxes each year.
View attachment 108459

I just plug in a new form on taxcut, 2 minutes later, I have what I need

 

[SmithOp]

His OP says $32K outside of SS, which is different from your interpretation of SS amount of $32K. $32K outside of SS + SS will definitely result in SS being taxed.

The SS Worksheet posted is correct, only 1/2 of SS is counted plus other income. Look at the first couple of steps on the worksheet.

 

[VacationForever]

The SS Worksheet posted is correct, only 1/2 of SS is counted plus other income. Look at the first couple of steps on the worksheet.

I am not questioning the SS worksheet. I am simply replying to a couple of posts.

 

[SmithOp]

I am not questioning the SS worksheet. I am simply replying to a couple of posts.

I was correcting your formula - "$32K outside of SS + SS will definitely result in SS being taxed.". Should be 1/2SS

The correct formula is on the worksheet posted - 1/2 SS + outside income > $32k then SS will be taxed based on the amount over 32k.

Step 2 multiply by 50% (0.50)

 

[VacationForever]

I was correcting your formula - "$32K outside of SS + SS will definitely result in SS being taxed.". Should be 1/2SS

The correct formula is on the worksheet posted - 1/2 SS + outside income > $32k then SS will be taxed based on the amount over 32k.

Step 2 multiply by 50% (0.50)

I did not say 100%, hence the link that I posted which helps with the calculation.

 

[easyrider]

yeah, my bad - I didn't see the word "outside" in the original post. An extra $32k definitely affects the taxation of SS
Senior moment ......... 'crowdsourcing' works!

I can't believe you didn't read that right. Neither did I.

Bill