"if I start receiving Social Security..."
FIRST YEAR OF SOCIAL SECURITY
People get really confused when they start getting SS. If you are not full retirement age, SS can reduce your benefits if you earn over a certain amount. But they do not do that during the FIRST year that you transition from working to getting SS. After that, if you are not full retirement age, they can reduce your benefit if you continue to work and earn over the limit.
None of that means that your SS is not taxable during the first year. It is. If you receive other income while receiving SS, your SS can be taxable. If you were expecting SS to be "tax free" the first year, you were mistaken about how it works.
FIRST YEAR OF SS RULES
https://faq.ssa.gov/en-US/Topic/article/KA-01927?msclkid=11bc282ccf2211ecb65078152b05ae6b
https://www.ssa.gov/pubs/EN-05-10069.pdf
Up to 85% of your Social Security benefits can be taxable on your federal tax return. There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits. When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable.
What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2021 it was $18,960. For 2022 it was $19,560 — for 2023 $21,240) For 2024, $22,320. For 2025 it will be $23,400
After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare. If you work as an independent contractor then you will pay self-employment tax for Social Security and Medicare.
To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2024 Form 1040
https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable
You need to file a federal return if half your Social Security plus your other income is
Single or Head of Household $25,000
Married Filing Jointly $32,000
Married Filing Separately $0
Some additional information: There are 9 states that tax Social Security—Colorado, Connecticut,, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia These states offer varying degrees of income exemptions, but two mirror the federal tax schedule: MN and VT.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
