Many Americans think that the 2023 taxation of social security benefits is unfair. Thus, the question arises; why are the benefits of social security being taxed?
2023 Taxation of Social Security Benefits (Photo: McDonald CPA)
2023 Taxation of Social Security Benefits
According to The Coastland Times, many Americans believe that the 2023 taxation of social security benefits is unfair because retirees already contributed to the taxes through their Social Security FICA payroll when they were still working.
Due to this, the question arises; “Why are the benefits of social security being taxed at all?”
Despite a popular misconception, the 2023 taxation of social security benefits was enacted at a time when social security having financial issues. Thus, the beneficiary only pays 50% of the Social Security contribution as an employer and so needs to pay for the half after retiring.
2023 Taxation of Social Security Benefits: What Baby Boomers Need to Know
The Motley Fool reports that more than half of the adults do not know about the 2023 taxation of social security benefits. Thus, The Motley Fool provided things that baby boomers need to know about the 2023 taxation of social security benefits.
The 2023 taxation of social security benefits: Firstly, retirees owe either 50% or 85% of federal income tax on benefits. More than half of the recipients now owe tax on benefits because of the annual cost of living adjustments. Secondly, retirees might also owe the state income tax on benefits. Lastly, retirees with income over the threshold should keep paying the federal income tax on social security benefits as the federal government has no plans to stop taxing social security benefits.
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