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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 13486
Experience:  Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level
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I am 66 + years old ( born 7/15/1947). And I work full time.

Resolved Question:

I am 66 + years old ( born 7/15/1947). And I work full time. My earning with a 2per cent profit sharing paid quarterly is over $110,000 each year. I maximize my 401k of $ 22,500 and annuity of $6500 each year and I receive a pension from earlier divorce of $3058 which I pay taxes on, I have a Roth IRA which is taxed at time I am paid on balance of profit sharing. I file single with zero deductions, my question is since I can go ahead and get full benefits on my social security now and my plans are to retire at 68 years old, how will this affect my earnings to be taxed? I realize I will still have to pay taxes, but I think I will come out better by starting social security now instead of 68. Can you help me with this?
Submitted: 10 months ago.
Category: Social Security
Expert:  Megan C replied 10 months ago.

Megan C :

I realize you have a question about social security. My goal is to provide you with excellent service, and help you better understand your options.

Megan C :

How are you doing today?

Megan C :

How your social security impacts your taxes is that 85% of your social security benefit will be taxable to you.

Customer: I am waiting on an answer to my question
Megan C :

Did you see my response?

Megan C :

The benefit will have no impact on your other income to be taxed, but 85% of your benefit will be taxed.

Megan C :

Once you are no longer making $110,000 per year, then the amount of social security to be taxed would be lower.

Customer: No Megan, the last thing I see is how are you doing today?
Megan C :

Okay you did not see my response then. Did you see what I just wrote you before you replied?

Megan C :

You can CLICK HERE for a calculator that will help you determine how much of your social security benefit is taxable.

Customer: So you are saying 85 per cent of my social security will be taxed? Or I pay 85 per cent on everything I receive as social security
Megan C :

No, 85% of the benefit is taxed. So, if you had a benefit of $10,000 only $8,500 would be included in income

Megan C :

I used that figure for simplicity

Customer: my social security at this time shows $2149 per month, what part of that is taxed
Megan C :

Approx $1,827 would be taxed as income to you

Customer: Ok I think I understand, so I think it will pay off to receive over $24,000 year and pay the additional approx $2000 if I understand this correctly
Megan C :

Yes, it would be worth it to take your retirement now

Customer: Thank you so very much! You have satisfied my question!
Megan C :

YOu're welcome. If you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer: One more question, does my salary tax amount change if I make another 20,000 that year
Megan C :

No, you will still safely be in the 28% tax bracket

Customer: In profit sharing?
Megan C :

Your profit sharing will not change, either

Customer: ok thank you
Megan C :

You're welcome

Megan C, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 13486
Experience: Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level
Megan C and other Social Security Specialists are ready to help you
Expert:  Megan C replied 10 months ago.
Thanks, Gail for your positive rating. Please come back and visit me any time you have a question that needs answered. It was a pleasure working with you today.

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