The following is a quote from Dallas Morning News
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/101704dnmuswhatretire.7a98c.html
"Financial advisers have a warning for those who receive Social Security and continue to work: The tax collector never retires.
If your outside income is high enough, it can trigger taxes on your Social Security benefits.
Half of your benefits are taxed when income exceeds $25,000 for single taxpayers or $32,000 for married couples. If income exceeds $34,000 or $44,000, then up to 85 percent of Social Security benefits will be taxed.
In the most extreme case, of every additional dollar you earn at your post-retirement job, 50 cents goes straight to Uncle Sam. "
Could someone explain to me how the federal tax can be 50%, while the max marginal tax rate is 35%?
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/101704dnmuswhatretire.7a98c.html
"Financial advisers have a warning for those who receive Social Security and continue to work: The tax collector never retires.
If your outside income is high enough, it can trigger taxes on your Social Security benefits.
Half of your benefits are taxed when income exceeds $25,000 for single taxpayers or $32,000 for married couples. If income exceeds $34,000 or $44,000, then up to 85 percent of Social Security benefits will be taxed.
In the most extreme case, of every additional dollar you earn at your post-retirement job, 50 cents goes straight to Uncle Sam. "
Could someone explain to me how the federal tax can be 50%, while the max marginal tax rate is 35%?