How will my SS be taxed ?

[AngelaNYC]

I will turn 65 later this year. I have not started taking SS yet but want to know how it will be taxed once I do decide to take it.  I live in New York City.  How will the Fed tax my SS once I decide to take it?  Will this income be taxed by New York State as well?  

I also have a 403B as well an IRA. Same question for these when I decide to withdraw from them.  

Finally, how best to locate and hire a tax expert? I prefer to be able to meet in person or at least talk remotely.  What qualifications to look for to be sure the tax expert is a good one?

Many thanks!

[JasonH24]

The amount of Social Security taxable (0-85%) depends on your total income. The best idea would be for you to use TurboTax's Tax Calculator to get an idea of how your expected income from retirement plans will impact your tax liability when you add it to your social security income. (Please note, the calculator is still showing 2023 tax rates but it will update soon to be 2024.) New York does not tax Social Security.

The Tax Calculator will help estimate federal taxes on your other retirement accocunts as well.

Money withdrawn from pensions and 401(k)s, 403(b)s and IRAs are combined and taxed as regular income in New York. But federal and New York state pensions and military retirement pay are tax-exempt.

For those 59½ or older, the first $20,000 of retirement income (from a corporate pension, an IRA, a 401(k) account or another retirement plan) is tax-exempt. If you are married, each spouse is eligible for the $20,000 exclusion, for a total of $40,000.

The best way of finding a local tax advisor may be by asking for recommendations. Also consider length of time in business and certifications such as CPA and CFP.

Thanks for asking your questions!

[SwapnaM]

Whether or not your Social Security income is taxable depends on your total income, including your Social Security plus any other income. Depending on provisional income, up to 85% of Social Security benefits can be taxed  by the IRS at ordinary income tax rates.

For those with additional sources of income, the key figure is the Modified Adjusted Gross Income (MAGI). The MAGI includes half of your Social Security, plus other sources of income. Once your MAGI exceeds the base amount for your filing status ($32,000 for Married Filing Jointly or $25,000 for all others), at least part of your Social Security income becomes taxable. The taxable portion of your Social Security income increases once you reach additional MAGI thresholds.

https://turbotax.intuit.com/tax-tips/irs-tax-return/a-guide-to-social-security-tax/L5QxGNcJL 

Distributions from IRA & other retirement/pension accounts are fully taxable on your federal return as ordinary income unless you made after-tax contributions.

In New York, all Social Security retirement benefits are exempt from taxation.

Your pension income is not taxable in New York State when it is paid by:

• New York State or local government
• the federal government, including Social Security benefits
• certain public authorities
• If your pension is taxable to New York and you are over the age of 59 ½ or turn 59 ½ during the tax year, you may qualify for a pension and annuity exclusion of up to $20,000. This exclusion from New York State taxable income applies to pension and annuity income included in your federal adjusted gross income.

TurboTax offers Full Service where a tax expert will prepare & file the taxes for you. You will be matched with an expert from your state, if you request one. https://turbotax.intuit.com/personal-taxes/online/live/full-service/.

If you need to meet the Tax-Expert in person, TurboTax also has the Verified Pro program.  Intuit screens these tax professionals to ensure they have the necessary qualifications, but they're professionals who run their own practices. They’ll work with you on terms you both agree to. https://pros.turbotax.intuit.com/ 

@AngelaNYC Thankyou for this wonderful question!