Managing Social Security Taxes
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Social Security incomeSmartAsset
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Business & Economics
How Can I Cut Taxes on My $3,300 Monthly Social Security Benefit?
78% Informative
Approximately 40% of households pay taxes on their Social Security benefits.
Social Security taxes are based on a rather straightforward income formula.
The only real ways to reduce how much of your benefits are taxable is to reduce your taxable income or qualify for a lower marginal tax rate.
Like with most retirement income, benefits are not subject to FICA (payroll) taxes, so you only pay income taxes on this money.
The only way to reduce the taxes you pay on Social Security benefits is to reduce your taxable income, your marginal tax rate or both.
You can help manage the impact of these taxes by requesting federal withholding.
Roth IRA or Capital Gains Conversions are perhaps the most straightforward option.
Structure your withdrawals around the benefit tax tiers.
SmartAsset 's free tool matches you with up to three vetted financial advisors.
You can have a free introductory call with your advisor matches to decide which one you feel is right for you.
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