Do i pay taxes on social security when i reach my full retirement age?

Answer 1

The answer depends on your individual circumstances.

If you are retired and Social Security benefits are your only source of income, you may file, but generally will not be taxed. If you also receive income from sources other than Social Security, your benefits will be taxed if your total taxable income exceeds a certain threshold.

The formula is very simple. Your adjusted gross income (AGI), meaning income from all taxable sources, will fall into one of the following categories. Depending on your personal situation, you could be taxed on 0% of your Social Security benefits, on 50% of your benefits, or on 85% of your benefits.

• For a single taxpayer the base amount (cap) is $25,000.
• If your total AGI is $25-34,000, you will pay tax on 50% of your Social Security benefits
• If your total AGI is above $34,000, you will pay tax on 85% of your benefits

• For married couples filing jointly, the base amount is $32,000
• If your total AGI is $32-$44,000, you will pay tax on 50% of your Social Security benefits
• If your total AGI is above $44,000, you will pay tax on 85% of your benefits

Answer 2

Yes, unfortunately this is the case. It's a pro-rated amount after your AGI exceeds a certain threshold. The generally increased per year so you can check the IRS web page or check the social security web page for the AGI limitation.

Charles Coker,CPA

Charles, I think you answered a different question;

What I think the original question was, is: "Do you pay FICA taxes on earned income after retiring (retirement meaning: collecting a SS benefit)?".

I think the answer is simply: yes.

Are there other ways that work can increase your benefits?Yes. Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due.