Strategically managing taxes can significantly affect Social Security benefits. Understanding the tax brackets is crucial, as up to 85% of benefits may be taxable based on combined income. Single filers face no tax below $25,000, while married couples see a threshold of $32,000. Deferring income through a side hustle or small business can also help reduce tax burdens, making retirement an opportune moment to maximize deductions and credits. Awareness of state tax implications is equally important for optimizing Social Security income.
It's important to know that the federal government may tax up to 85% of your Social Security benefits, depending on your overall income.
The goal is to minimize taxes to the best of your ability, and here, we'll cover five tips that can help.
If you're claiming Social Security for the first time, you're wise to consider the role taxes will play.
There's no better time than retirement to double-down on claiming deductions and credits.
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