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I know that social security is taxed. If I continue to work

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I know that social security...
I know that social security is taxed. If I continue to work and draw my SS at age 66(my full retirement age) how will my social security be taxed. I was told by my financial adviser that if I make more than $34000 MAGI my SS will be taxed at 85%. Is this correct?
Submitted: 6 years ago.Category: Tax
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Answered in 2 minutes by:
6/1/2011
Tax Professional: Jax Tax, Tax Attorney replied 6 years ago
Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1,408
Experience: JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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Jax Tax : Welcome to just answer. I am here to help.
Jax Tax :

Regardless of age, social security is taxed if earned income exceeds a certain level. Currently, your financial adviser is correct.

Jax Tax :

The MAGI level when you turn 66 is still to be determined which is the inherent problem in financial planning.

JACUSTOMER-x5er49y0- :

That seems grossly unfair. SS is already a tax and then it gets taxed again. What can you tell me about modified adjusted gross income?

Jax Tax :

The MAGI is your earned income plus 1/2 of your social security.

Jax Tax :

If this goes over the limit, up to 85% of your SSI is subject to your current tax rate.

Jax Tax :

I agree with the unfairness of the situation, but.....what can I do?

Jax Tax :

So, as long as your earned income plus 1/2 social security does not exceed the particular years limit, there is no tax on the SSI. I hope this answers your question. If so, please accept and feel free to leave a comment.

Jax Tax :

Do you have any other questions.

JACUSTOMER-x5er49y0- :

Is there any legal way arounnd this? If I don't have enough deductions to bring my MAGI down to 34000 then unless I am ready to completely retire and live a substandard life I am toast. It seems the Gov is forcing people to work longer than they would like

JACUSTOMER-x5er49y0- :

Your comment about earned income and 1/2 SS does not esceed the paarticular years limit...soes this mean it is a revolving door?Changein rules every year? How are people supposed to survivie if they are not weaothy?

Jax Tax :

They do change the limits, but it is usually increased in your favor.

Jax Tax :

As for credits and deductions, they do decrease your tax. There are none specifically tied to SSI.

Jax Tax :

There are increased deductions once you reach 65 which will help offset the income. That is good news.

JACUSTOMER-x5er49y0- :

What deductions? I am already 65

Jax Tax :

On the 1040 it is line 39a

JACUSTOMER-x5er49y0- :

What, do I get $.50 for being 65? I am not satisfied with these responses. I do not accept.

Jax Tax :

I will open the question to other experts, but to make sure I answered your question: "Is this correct?" The answer is yes.

JACUSTOMER-x5er49y0- :

I am opting out of this chat as well. I do not accept your answers and I expect that my credit card will not be charged. You have advertised complete satisfaction. I am not satisfied. Thank you for your time

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