Thank you. My wife and I were on active duty in the US Navy. She died on active duty and is buried with full honors in Arlington National Cemetery. I retired at nearly 30 years on active duty In the Summer of 2021. I decided that I would take survivor benefit, waiting until age 70 to take mine. I would have asked her to do the same so she could be financially independent. I miss her terribly. I thank you for all of your videos.

@tonyroo11

7 ай бұрын

Thank you for your and your wife's Service

Why is social security even taxed! Especially, when the tax table is not even adjusted for inflation.

@HolySchmidt

Жыл бұрын

I hear you

@acetheking3136

Жыл бұрын

Republicans smh

@tracy6947

Жыл бұрын

@@acetheking3136 both parties agreed unanimously to tax social security benefits

@tracy6947

Жыл бұрын

Created Revenue

@johngill2853

Жыл бұрын

Because you never paid tax on the part your employee contributed all them years

Geoff, With the the 3 tests, do you get to choose between them and of course select the lowest outcome as in this scenario where only $16200 was subject to tax? I assume that amount is then added to AGI to determine your final tax?

@vivianowen

Жыл бұрын

If you want to grow your wealth, you should talk to an investment adviser. I can vouch for their expertise, because I have made over a million dollars since 2021 with their help. I just bought my third rental property, thanks to Rochelle Dungca-Schreiber, my investment adviser. You can find her online and see for yourself how good she is.

@lp6696

11 ай бұрын

I just watched the video (2 times) and at the end, it does say Choose Option 3 (6:08 mark), and in the first part of the video it does mention you do get to pick which of the 3 options is the lowest. So 16,200 is then added to your AGI and that total amount is what is taxed I assume by Federal and I am going to check my State taxes to see if that is any different. I plan to read the information in the link to the social security rules. I wonder how anyone figured out the above thresholds to put into the tax codes and how long that had taken to do (they were paid by our taxes to do this).

@anniesshenanigans3815

4 ай бұрын

@@lp6696 very convoluted tax system!! I though going into retirement would be EASIER tax filing.. I have filed my own taxes since I was 16..

@lp6696

4 ай бұрын

@@anniesshenanigans3815 This is strange I did not write the above comment it appears KZread has an issue with who was the author of the comment. When I get time I will try to figure out how to report this to KZread, I have never put a time mark in a comment before, and I am not even sure how to do that.

Simple straightforward example, thank you. This is the first time I’ve ever heard of choosing lowest of 3 calculations like in your example. Most content just states the income thresholds.

Great information. They never say how much money is put into the system when someone passes away or even if it is put back into the system. Unfortunately there are quite a few people that paid into SS all of their working lives but never got to receive any payments from what they paid in because they are no longer with us. It is bad enough that we pay into our own SS throughout our working years, then when we no longer can work or just don't want to because of various reasons, we still have to pay taxes on what we paid in.

My financial advisor Mr. Rahul Gupta employs the Hammer candlestick pattern, which is a single candlestick pattern that develops at the end of a decline and indicates a bullish reversal, to multiply earnings for me.

@Keerahmendes

Жыл бұрын

Correspond with him in Telgram with the user below

@Keerahmendes

Жыл бұрын

RahulGupta808

@RahulGuptaS880

Жыл бұрын

Actually, when someone is good at what he/she does, their good work will surely speak, Mr Rahul Gupta is really a top notch in trading, you can try him out

@RahulGuptaS880

Жыл бұрын

saw this name been mentioned on CNBC news sometime.. i think i'd give him a trail as well.

@marcd1981

Жыл бұрын

@tokenslnvaders5640 Do not reply to these bots. This is a stock trading scam they are trying to get people to get into, not serious retirement savings or Social Security tax information.

Thank you so much. I had never heard of the tests before and have not found a lot of info on the net concerning the tests. I have always done my own taxes and may have missed this. Fortunately for me I have not yet started collecting and will probably wait til FRA. Great channel!

Geoff - Thanks for saying, "may owe" a lot. The most valuable words in the tax code on this subject are, "may owe" and "up to". Most YT videos on this subject wrongly state that if your combined income falls in either the 50% or 85% range that your entire SS benefit is taxed at 50% or 85% which is far from the truth. Your worksheet makes this much less complicated.

Based on the comments, there seems to be some confusion as to the 35, 50, and 85 numbers. This isn't the tax RATE, but rather the amount of income to be taxed. In the example given, if this couple is over 65, they still have their standard deduction to use. The AGI would be 52,200 and deduction is 27,700 for a taxable income of 24,500. Marginal rate is 12%. So, what started out as 40,000 in SS benefits, is reduced to 16,200 taxable, for a total tax of 1,944 on those benefits.

You are awesome, Geoff! Thanks so much for your useful information.

@HolySchmidt

Жыл бұрын

Thanks Buck

Thanks so much Geoff!! Great way to start my day having my first year of claiming taxes on my SSR off of my mind!

I am going to watch this several times until I can figure out that 3 option thing.. this is nuts!! I have prepared and filed my own taxes since I was 16. Even with property, deductions, etc.. nothing seems as convoluted as this!!

@carolynnorton9552

13 күн бұрын

I got confused too. He's going backwards in his explanation: He is first stating what the combined income is, THEN starts how he did the calculation to arrive at the combined income. It looks, at first, like he is using the combined income to start the calculation. Confusing!

Thanks for trying to explain this very confusing taxation. I hope my tax software encompasses it into the tax calculation.

All I can say right now is...wow... First, thank you for trying to explain this to the average tax payer out here. This is the first time I've looked into taxes on Social Security, and all I can think of is how insane the system seems to be. Why on Earth are there so many scenarios for the average person? We all know if you have enough money, none of this is even applicable, which makes it even more frustrating. I just retired last year at 59 years old. I was planning on retiring at 62, but there were multiple circumstances that allowed me to retire even earlier, saving my sanity in the process. One of these is the fact I have a pension to draw from which takes care of my expenses every month. I still have a 401k and Social Security to start drawing from, and I'm still making decisions for those withdrawals. Geoff, even with all of the information you just supplied in this video, my situation was not covered. You stated the single amounts, and the married, filing jointly amounts, to apply the three tests to when figuring your taxes. However, I have re-married in the past couple of years, but my wife and I do not file jointly. How does this information apply in my case?

thank you for this video Geoff! love the detailed explanation and example you’ve shared, learned something today 😊

Can you share the "simple" worksheet you said was downloadable?

Really good to know. You have expertly explained it to simple calculations. Thanks for another wonderful video!

So helpful..I appreciate the way you make the confusing easy to understand!

@kellyyork3898

Жыл бұрын

Agree. Why wasn’t he my algebra teacher? I could have learned so much more. ; )

Makes my mind spin, but, thank you!

Or you could just use the worksheet on page 32 of the 2022 instructions for form 1040. It is actually very simple and Geoff's three tests are built into it so that you don't even notice them.

@BadPhD777

Жыл бұрын

Just went through page 32. They sure know how to make things complicated, but it works if you follow the instructions

@todddunn945

Жыл бұрын

@@BadPhD777I put that worksheet and the cap gains and qualified dividends worksheet into my tax spreadsheet. Now all I have to do is enter income numbers in the various categories. It is handy for tax planning.

@BadPhD777

Жыл бұрын

@@todddunn945 I've got it in my spreadsheet now too! Been comparing how much tax I would pay with and without taking SS. I live in Oregon, and they don't tax SS, so I'll save on taxes if I take SS and some IRA vs all IRA.

@todddunn945

Жыл бұрын

@@BadPhD777 I am in Maine where SS is also not taxed by the state. Maine also gives us the Full federal standard deduction plus a $4,700 dollar personal exemption in 2023. I hold some treasury securities that are exempt from state tax. Maine also has a sizeable pension/IRA/401K/403B exemption. Overall Maine treats retirees well. Incidentally, your screen name suggests that you too are an intellectual elite. Same for the both of us.

@BadPhD777

Жыл бұрын

@@todddunn945 I am one who does way too much pondering over the myriad of decisions when it comes to my retirement finances :-) The spreadsheet is my best friend!

This is great video. Thanks for showing the three tests.

Thanks much. Practical, usable subject matter.

Great explanation. Cleared up my confusion.

I just use the worksheet (page 32 of 114 in the 2023 1040 instruction book). From what I see, there is only one unique answer for a given situation, i.e., no picking btwn Case 1, Case 2, Case 3, etc.

Excellent example - very helpful!

Nicely explained! About a month ago I used my own spreadsheet version I created a few years ago to calculate our tax free Roth conversions for 2022 before the end of the year. I love that thing as I can dial in our taxes perfectly to maximize the form 8880 retirement savers credit and any surprises can be corrected with our new IRA/Roth contributions made post 2022 but before April 18th and credited as 2022 contributions. IRA contributions to lower our taxable income and increased Roth conversions to increase it. Once done with our Roth conversions it's on to stepping up the cost basis in our taxable investments just in case congress wants to change the 0% LTCG/QD rate of the 12% bracket or if we find ourselves in a higher bracket later in life. I find that in this stage of our lives (and at every stage thus far) our spending or more to the point the lack thereof drives our tax plan/lack of tax liability more than anything. Cheers!

Good video. It's a shame that any of your SS is taxed, but it is good to see the calculations to minimize the taxable amount.

I'm in the "0%" bracket for long term capital gains, and also get SS. When the calculations are done, those LTCG's aren't really tax free. They only become tax free after 85% of the SS is already taxed and before the tax bracket ceiling is reached.

Thanks for the new knowledge!

Thank you mr Schmidt

Does a tax program like turbo tax have these calculations and recommend the best option?

Thanks for the video. It seems it is better to pay into Roth than Non-Roth so as to avoid distributions jack up the "Combined Income".

Thankyou for Great information

What a good video! I hope more people find this one!

Thank you for posting this helpful Video. I really enjoy and appreciate your videos and your channel.

If anyone's interested, I followed Geoff's calculations in Excel for my 2023 amounts as well as my estimated 2024 amounts. The excel results matched the Social Security Worksheet from H&R Block 2023 software. The 2023 values resulted in Test #1 while the 2024 values resulted in Test #3. THANKS GEOFF!!

Thank you, I've never seen options #2 or #3 before. Very helpful

Excellent presentation! Thank you.

If you use software like Turbo Tax to do your taxes, does it calculate these numbers for you and figure out the best one? Or is this something I need to do manually?

@j.patrickmoore9137

Жыл бұрын

You beat me to that question...

@barbiec4312

Жыл бұрын

Yes, I need to know this too.

@johnscott2746

Жыл бұрын

Yes all of this is programmed in to the online tax programs.

Thank you for the information. I was unaware of option 2 and option 3. After the video I looked on the SSA website and could not find this information. Would you post a link to where this information is? The link you posted to the SSA only explained option 1.

Geoff - I find it interesting that you use the correct term, "combined income". Many other financial professionals call it, "provisional income". Do you have any idea where the term "provisional income" originated and why it has such widespread use?

@ForestToFarm

4 ай бұрын

I would think to aid in keeping us all confused so we pay someone to take care of our finances. Terry

I have not seen all three tests anywhere before. Most people explaining this either do Test 1 and Test 3, or just Test 3, but with 85%. Only one other site did Test 3 with 35% (and they also had Test 1 with 85%). I've never seen Test 2 before with 50% of the total SS payment. It is very hard to find where the accurate source of information is when all these KZreadrs are explaining it different ways. Most people I've seen so far just explain it with Test 3 with 85%. Update: I found the IRS Worksheet 1 and examples where this is done (Pub 915). The reason why 35% is used in Test 3 is because 50% is used for the entire amount subtracting the lower threshold, so you only need 35% more for the upper threshold to make 85%. Test 1 and Test 3 are in there by default and the lower amount is chosen. Not sure if Test 2 is in there or it's a different Worksheet. There are nuances when lower income levels are used when trying to compare it to other KZreadr's videos. It didn't always tie out to the formula above exactly, but I may have missed something, or there may be assumptions I'm not using.

Question: with the three different tests: options you gave, if I use the govt. tax program how does it figure out which one to use? Does it use the one that benefits me or the one that benefits the govt.?

I've tried a couple of different browsers, but have been unable to download the worksheet??

Great explanation Geoff of a confusing topic.

One should assume that all pension plans are already taxed, that would also include Social Security which for many they may need to pay quarterly due to their bank's report to the IRS.

I don't see a test 2 as an option. IRS does have a worksheet for the calculation which is basically test one or three but your examples are more straight forward.

You indicate that "tax free income" like municipal bond income must be included. Would that also include distributions from a Roth IRA?

@rickdunn3883

Жыл бұрын

I dont think Roth distributions (after 5 years) count towards combined income.

Did not know about the 3 tests Great Vid.... does Tax filing Software calculate this ?

Thank you. This was incredibly helpful.

This was helpful. Thanks!

So you just get to choose the lowest number and put that number on the tax form where it asks for your yearly SSA payments instead of your ACTUAL yearly SSA payments. If that’s so, why doesn’t Turbo tax calculate it for you?

Hi Geoff, the link to the worksheet appears to be broken.

Any government entity that has a 100,000 page website needs to be simplified, streamlined and downsized. How much of our income taxes go JUST to keeping this going?

I just started receiving SS benefits this year-2024. I did a pro-forma tax return using my actual 2023 return and adjusting it for expected SS payments this year and submitting quarterly Federal Income Tax estimates to the IRS. My question is will tax preparation software like Tax Cut and Turbo Tax automatically select the best option for you?

Does turbo automatically calculate which of the 3 options is best.

Thx, I am cornfused. Dats Y I have an accountant who worked for the IRS.

I am retiring shortly at age 62 and will start receiving my SSi benefit immediately while my wife will continue to work until age 65. Our income sources will be my SSI, my wife's W-2 income and monies derived from the rental real estate we own. My question is whether or not the rental income will used in the SSI taxation formula?

It's not easy, buy you certainly helped! Thanks.

On 3 test slide, where did test 2 come from? I have never heard of this

so this is confusing. if i get 25,000 from ss and a $7200.00 dollar pension i have to pay $15.000 in tax?

Could you explain military retirement as income for SS?

buy tax software (i use hr block). You can make multiple tax returns to see tax liabilities for various incomes....

@km-bo3zx

Жыл бұрын

I do the same.

That is kind of complicated. But well explained. Are Medicare premiums deducted from Social Security benefits before taxes?

@apga1998

Жыл бұрын

No they are not. Your taxable social security income( for the purpose of determining your combined income) is based on your Gross Benefit, not the amount remaining after your Medicare premium is deducted. The net amount is what is you receive each month. You do get to claim a standard deduction. This will reduce your taxable income.

@sharilyn61

8 ай бұрын

Yes. Premiums are deducted pre tax, and you have to pay taxes on them.

Thanks for video. When I retired I received a pension from work. At 65 I started taking my SS payment. If half of my SS payment plus my pension (which is already having federal taxes taken out) equal $31,000 / yr, can you help explain to me how much I will be taxed? Any help would be appreciated as this is way over my head. Thanks.

These formulas appear to be designed to benefit those who have more income coming from social security than they do other sources. Correct?

On his 3 test slide, I think AGI is a typo. It should be other income except for SS or something. AGI is an amount that contains taxable SS already, so it doesn’t make sense 😊

Do you have a video that explains the taxable amount one arrives at by combining "Adjusted Gross Income" plus "Taxable Amount of Social Security Benefits"

I wonder what is considered income in this scenario? Interest, short term capital gains, long term capital gains, IRA withdrawals, income from a part time and full time job, or are they still working on how to make it more complicated?

@Satjr35031

Жыл бұрын

Income is Income except if it’s a Roth IRA

You’re the best! Thank you ❤

I tried checking last years taxes using your worksheet to make sure I paid the least amount in taxes. I noticed what you call AGI or adjusted gross income is different form what the IRS calls AGI. Your AGI does not include Social Security income but AGI in the 2022 form 1040 (line 11) includes Social Security payments (line 6b added in line 9).

@HighCountryRambler

11 ай бұрын

Didn't he state you use 50% of your SS income for AGI? One of the first slides.

your link to the work sheet does not work.

IRS form W-4P is written in Klingon. Please do a video on this new IRS nightmare. Thanks

Thank goodness that tax software handles these calculations (and selects the most correct--the least amount--of tax due). [at least, I hope that's happening...]

Where and when do I enter the $16200. In the far right as my SS income? Or put my gross there? Please someone explain

My husband and I are both on Social Security and take out 15% for each of us monthly. We had to get a new roof so I took my pension and paid the 20% interest rate to cash it out and we’re able to pay for the roof plus some of our savings. Will us taking out 15% monthly help reduce the amount we will pay at tax time?

what about married filing single ? which bracket???

So the government gives with one hand and takes back with the other.

Geoff - 9 years till retirement and I've creating a retirement earnings, costs and taxes workbook based on what I currently anticipate as where my wife and I will be. In this workbook I've created a spreadsheet with the formulas for the 3 tests on calculating social security taxes. The workbook will update automatically when I change the yearly variables, such as new salaries, projected social security benefits, tax thresholds, etc. While I'm glad you created the worksheet for us to use to do this I've been looking for where on the IRS and/or Social Security websites that this test is available for retirees to use. This way I can look every year to see if the rules have changed so I can adjust my spreadsheet(s) accordingly. Can y ou tell me where I can find this?

@harborviewmanorresident6316

9 ай бұрын

I just created a spreadsheet using the calculations on the 1040 SS Worksheet. Not a difficult task. Worked perfectly using this example in the video. It automatically used option 3 just like the IRS 1040 worksheet does.

The rules were passed to tax the top ten percent of taxpayers receiving social security. By not indexing these thresholds about 90% are now taxed on some portion of their social security income. Simple solution raise the thresholds by indexing amounts for inflation.

Is the tax owed calculated on the amount over the threshold, or the entire amount? Thank you.

Hello, quick question, I am a 62 yo retired Federal employee. I get a monthly annuity and have Federal tax taken out of that. My wife still works and has Federal tax (10%) taken out each paycheck. This past year we got a Federal tax refund of over $2k. Since I turned 62 two months ago, my SSA Supplement ended. Starting this month I will begin receiving my Social Security benefit payment which works out to be about $700 more than my SSA supplement was per month. My question is, since my wife and I received a good amount from last years Federal tax return, am I required regardless to have additional Federal tax taken out of my Social Security benefit even if I think we are paying adequate Federal Taxes on our income? Thank you.

Good info. I had never heard of these 3 tests. I looked for worksheets (including from the IRS). They talk about the thresholds but then say you owe 85%. Where do I find these 3 tests? Would I be able to hire you for tax prep? Your website didn't mention anything about it.

Wondering if (passive) rental income is included in the AGI equation?

As a matter of fairness I have no problem paying FITs on my social security benefit since my employers contributed approximately half of my total contribution. The employers was a deductible expense for them and that income to me has never been taxed. Anyone who says they should not be taxed on social security income because they have already paid taxes on it is incorrect. They have only paid taxes on one half of their total benefit. However I do think the income thresholds should have been indexed at origination of the law as it was inevitable that wage inflation would push most incomes above the thresholds. If they had been indexed the threshold for a single person would be almost $79K while a married couples would be almost $99K.

Thanks Geoff!

I'm 66 and getting ready for a move to SE Asia and finding a great wife. Pretty cool that I'll get a break on taxes as I can use combined income.

Anyone know if military retirement pay is considered income for the purposes of figuring out your AGI per his examples?

Where did test 3 come from? Seems like everyone would benifit from thar. I didnt see that one on the reading I was doing.

Greetings Geoff what if you are reporting your overage in income a job to SSI and the money is being deducted monthly for every $2.00 over they deduct $1.00 do we follow the same process and will that change what is taxable? I would appreciate a reply in a video if possible. Thanks for this current video.

The link is not working

I think your use of the term Adjusted Gross Income is inaccurate when calculating combined income. Since AGI (Line 11 Form 1040) includes the social security benefit, it would be better to use the term Other Earned Income as the SS website does. Combined Income = Other Earned Income + 50% of SS benefit. Thoughts?

Hi there, I am in full retirment will collect my social securty soon ,BTY I am working in 2 iobs and have no any spouse. How will it be my tax on ss pymt?

The link is dead

Problem: AGI Includes taxable SS income, so how is it possible to calculate combined income? It’s a dog chasing it’s tail.

Hus and will be full age retirement and wants to collect social security and still work full-time, and they take 85 percent from social security,... Does that mean they take 85 percent of your social security??

What do you mean combined in for a single. Is it the SSI and if I work part time.?

Thank you SO much Geoff! I love how clearly you explain things. I have a question regarding your SS Tax calculation worksheet: if the combined income percentages calculated in Test 2 or Test 3 are negative numbers - are they subtracted from the total? Changed to zeros - which have no effect on the total? Or do they zero out the total - if the total Test calculation becomes negative as well? Thank you!

@thehoff1128

11 ай бұрын

I thought I understood it, but your comment has me wondering if I'm missing something. How could you get a negative number in tests 2 or 3? If your combined income is a negative number, you would be below the income thresholds and you don't have run the 3 tests and don't owe tax on the social security, right? 1:58

@bigbooklisa

11 ай бұрын

@@thehoff1128 I think it was negative because the AGI was lower than the 2nd threshold. It was awhile ago + I don't remember clearly.

One portion which seems to be missing from this vid is the Standard Deduction. The SD increased significantly under the Trump tax cuts. So even in Jeff’s formula where $16,200 of SS is subject to tax this is then added to the 36,000 agi So 16.2k + 36k = 52.2k now deduct 26k or so standard deduction. This is only 26,200 of taxable income. The first 20,500 is at 10%. 2,050. The next 5,700 is at 12%. 684 So 2,734 in Fed taxes from 76k income. This is an effective tax rate of 3.6% And here is another kicker. Who would have 36k AGI. If this is from IRA withdrawals then at a 4% annual withdrawal would be 900k balance. The numbers not very realistic. Most will have a bigger SS and smaller IRA withdrawal. So taxes even lower. If one has a pension it’s a bit different.

Link to worksheet doesn't work. Tried going to your home page to download from there but got same result. link is broken