5 Ways to Lower Your Social Security Tax Bill
Social Security retirees are staring down the barrel of one of the largest increases to benefits in decades in 2023. That's because high inflation should translate into a high cost of living adjustment (COLA) to benefits in order to help retirees keep up with higher prices. That COLA increase, however, could also result in retirees paying more taxes on their Social Security benefits if the increase pushes more of their combined income over certain thresholds.
Individuals with a combined income of more than $25,000 will have to pay taxes on as much as half of their Social Security benefits that exceed that threshold. Individuals with a combined income of more than $34,000 will have to pay taxes on as much as 85% of their benefits. For married couples, those numbers are $32,000 and $44,000, respectively.
With this in mind, retirees may want to consider ways they can lower their Social Security tax bills. Luckily, there are several ways to effectively do this. Here are five.
Source Fool.com
