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Paying income tax on Social Security payments depends on your total income and filing status. If your combined income is above a certain threshold, a portion of your Social Security benefits may be subject to income tax. The rules for taxation of Social Security benefits have been in place since 1983.
In most places, the taxation is based on your total income, not just the portion from social security.
Yes, you may have to pay federal income tax on your Social Security benefits if your income exceeds a certain threshold. The amount of tax you owe will depend on your total income, including other sources of income besides Social Security.
Fourteen of the 50 states tax Social Security benefits (through 2010):Same rate as Federal GovernmentMinnesotaNebraskaNorth DakotaRhode IslandVermontWest VirginiaTax Social Security based on Total IncomeConnecticutIowa (Phasing out tax levy from 2008-2014)Kansas (Only taxed if AGI is more than $75,000)Missouri (Will complete phase-out in 2010)MontanaAdds Federally Untaxed Social Security Income back to AGI*ColoradoNew MexicoUtah*These states apply broad age-determined income exclusions.
The 2010 cap is $106,800.00, which would result in 6621.60 (6.2%) being withheld. There is no cap on the Medicare insurance contribution amount, so the 1.45% amount will continue to be withheld on all earnings, and will be matched by your employer at 1.45% for a total 3.90% for the year.
You only have to pay tax on your Social Security income if your total taxable income is $25,000 or more for a single taxpayer, or $32,000 or more for a couple filing jointly. If your total income is below that amount, then you do not have to pay tax on your Social Security benefits.
Social Security Taxes are a Proportional Tax. A Percentage of a person's income is paid to Social Security, this is half of the total amount paid to them, the Other half of a person's Social Security Tax is paid by the Employer.
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This depends on the total of your lifetime earnings,
Yes, taxes are typically not taken out of Social Security benefits before you receive them. However, you may owe income taxes on your Social Security benefits depending on your total income and filing status.
For 2012, the Social Security (FICA) deduction is 6.2%; the Medicare deduction is 1.45%, for a total of 7.65%. The employer pays the same percentages.