Question

receiving social security at 62, is there increased tax liabilities

Forum|Forum|2 years ago
June 28, 2023
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I would like to know if my circumstance will put us at a penalty or increased tax bracket or federal tax liabilities: I am 62 1/2 and receive a pension, work a small part time job and just began receiving social security income. I am married and my husband is 65 and still working. Should I expect a big tax bill at the end of the year and what should I be doing now to prepare?

Ask the Experts - Energy - June 2023

C

conniem123

Hi 2011lkm,

Congratulations on your semi-retirement! Of course, that comes with tax planning too!

A portion of your social security MAY be taxable, it depends on the amount of your other income. If you earn between $32,000 and $44,000 per year as married filing jointly, you will pay income taxes on up to 50% of your Social Security benefits. If you earn more than $44,000, you’ll pay taxes on up to 85% of your benefits. You will never be taxed on more than 85% of your Social Security benefits.

Here is a great resource with an example for you to calculate using your income figures, https://www.ssa.gov/benefits/retirement/planner/taxes.html#:~:text=between%20%2425%2C000%20and%20%2434%2C000%2C%20you,your%20benefits%20may%20be%20taxable.

If you determine you will have some of your social security income taxable, you can

1) elect to have federal tax withheld from your social security income, https://www.ssa.gov/manage-benefits/request-withhold-taxes#:~:text=You%20will%20pay%20federal%20income,or%20%2432%2C000%2Fyear%20filing%20jointly. or 2) increase the withholdings from either you or your husband employments, or

3) make an estimated tax payment, or

4) set aside money.

I hope you find this helpful!

Connie

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