Social Security Tax Question

[rschuder]

I am drawing social security, and I am still working. I am paying social security tax on my current income. I have been informed that I can recover the social security tax I pay in each year because I am drawing my social security. How do I recover the social security tax payments each year?

[rjs]

"Have been informed" is not a reliable source of tax information. Receiving Social Security benefits does not allow you to "recover" the Social Security tax that is withheld from your pay. Where did you hear that?

Maybe what someone was saying is that when you collect Social Security benefits you are getting back the Social Security tax that was withheld from your pay in the past. That's not really true either, but a lot of people think it is.

[Anonymous]

you pay medicare and Fica/social security taxes on all earned income regardless of age. there is no refund for those collecting social security. 

[xmasbaby0]

Since you must continue to pay Social Security while you are still working, at some point Social Security will adjust the amount of your monthly benefits  a bit based on your continued withholdings.  But whoever told you that you get all of it back was mis-informing you.  That is incorrect.

TAX ON SOCIAL SECURITY

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 2017 that limit was $16,920 —for 2018 it will be $17,040—for 2019 it will be $17,640— for 2020 it will be $18,240)  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.

To see how much of your Social Security was taxable, look at lines 5a and 5b of your Form 1040

https://ttlc.intuit.com/questions/1899144-is-my-social-security-income-taxable

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 $25,000 when filing single or head of household, or $32,000 when filing married filing jointly, $0 if you are filing married filing separately.

Some additional information:  There are 13 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.  These states offer varying degrees of income exemptions, but four mirror the federal tax schedule: MN, ND,VT, and WV

[Opus 17]

You must continue to pay Social Security and Medicare tax on all of your income earned from working, even if you are collecting Social Security in retirement.  Depending on your overall work history, the additional Social Security withholding may result in increased benefit payments once the Social Security administration analyzes them.