I might have missed another thread on this, but apparently the House has introduced H.R. 1040 to eliminate federal taxation of Social Security. Very early in the process so will be interested to see how this progresses this year.
Congratulations! Glad it's w*rking out for you.I don't expect anything on this. I also didn't expect the Hill to eliminate the SS WEP and GPO provisions, but I just got a lump sum payment for the last six months of spousal benefits and am approved for monthly benefits going forward.
It's 85% now because every monthly social security check you get represents about 15% return of your original contribution, which was already taxed. About 85% of your monthly check represents earnings on the money contributed. Those earnings have never been taxed prior to your starting social security. Ideally, everyone would be taxed on 85% of their benefit. The sliding scale for lower income recipients was a political salve to get the 1983 changes enacted. And the non-indexing was intentional, so that eventually everyone would be paying the taxes on 85% as they should.Eliminating income tax on SS would be wonderful. But as a compromise, I'd be happy if they changed the 85% of SS being taxable to a smaller amount, like 40%-50%. Does anyone know why it's 85% now? And those income brackets that they use are very outdated. Maybe change those to be inflation adjusted.
I think I'll take the tax break now and worry about a haircut later, but YMMV.Goody, we can run SS out of money even sooner than otherwise. . .
I do think they should update the income levels. . . but as it is not up to me in any case it hardly matters what I think about it!
We have already started down that path.... WEP/GPO change. Might as well sink the sword in deeper!Goody, we can run SS out of money even sooner than otherwise. . .
I do think they should update the income levels. . . but as it is not up to me in any case it hardly matters what I think about it!
Not old enough for SS until "later" comes. . . so "later" is usually on my mind.I think I'll take the tax break now and worry about a haircut later, but YMMV.
Taxing my meager monthly stipend won't do much to keep SS afloat.Goody, we can run SS out of money even sooner than otherwise. . .
Are you absolutely positive this is correct and does it included my employers contributions too?It's 85% now because every monthly social security check you get represents about 15% return of your original contribution, which was already taxed. About 85% of your monthly check represents earnings on the money contributed. Those earnings have never been taxed prior to your starting social security. Ideally, everyone would be taxed on 85% of their benefit. The sliding scale for lower income recipients was a political salve to get the 1983 changes enacted. And the non-indexing was intentional, so that eventually everyone would be paying the taxes on 85% as they should.
Your employer's contribution is your contribution too. You really paid it and didn't know it. Every employer builds that cost into your wages when they hire you. Their match was really your contribution, you just didn't get it to begin with. Its built into your contribution package and you don't see it.Are you absolutely positive this is correct and does it included my employers contributions too?
The important thing for the discussion is that you didn't get taxed on the employer contribution.Your employer's contribution is your contribution too. You really paid it and didn't know it. Every employer builds that cost into your wages when they hire you. Their match was really your contribution, you just didn't get it to begin with. Its built into your contribution package and you don't see it.
Yes, this is so obvious to the self employed as they pay both sides of it! Ghhhaaaacccckkk!Your employer's contribution is your contribution too. You really paid it and didn't know it. Every employer builds that cost into your wages when they hire you. Their match was really your contribution, you just didn't get it to begin with. Its built into your contribution package and you don't see it.
Yup. 15.6% of your income please. I did it for 35 years.Yes, this is so obvious to the self employed as they pay both sides of it! Ghhhaaaacccckkk!
I was self employed. I paid the employer's side of the contribution. It wasn't deductible either like it would be to an outside employer. How does that figure into the contribution part being taxable ?The important thing for the discussion is that you didn't get taxed on the employer contribution.
I don't think that's right.I was self employed. I paid the employer's side of the contribution. It wasn't deductible either like it would be to an outside employer.
You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income.
Parents too. Never had a desire for self employment. I saw how much of a hassle it was. I thought Megacorp could be a hassle, but nothing like running a small business. I feel for you Stormy Kromer - all the hassle and you have to pay even more SS taxes! I hope it paid off, SS wise.Yup. 15.6% of your income please. I did it for 35 years.