How to Pay NO TAXES on Social Security | Five Simple Strategies
Вставка
- Опубліковано 1 тра 2021
- This video discusses five simple strategies on how to pay no taxes on Social Security by using simple exceptions to Social Security tax rules. This video has the added benefit of help people reduce their traditional income so they pay lower taxes overall.
Social Security Tax Calculation Worksheet:
HolySchmidt.com/SSTax
States that Don't Tax Social Security Payments:
Alabama (no state income tax)
Alaska
Arizona
Arkansas
Delaware
Florida (no state income tax)
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Nevada (no state income tax)
New Hampshire (no state income tax)
New Jersey
New York
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
South Dakota (no state income tax)
Tennessee (no state income tax)
Texas (no state income tax)
Washington (no state income tax)
Washington D.C.
Wisconsin
Wyoming (no state income tax)
Other Important Links:
Free "Retirement Ready" Checklist:
holyschmidt.com/checklist/
Federal Reserve Board Survey of Consumer Finances:
www.federalreserve.gov/econre...
Social Security Administration Application for Benefits
secure.ssa.gov/iClaim/rib
Current Social Security Cost of Living Adjustment
www.ssa.gov/cola/
Social Security Payment Estimator
www.ssa.gov/benefits/retireme...
THE CHANNEL’S MOST POPULAR VIDEOS
Should You Take Social Security at Age 62 and Invest it?
• Should You Take Social...
7 GOOD REASONS to File for Social Security Benefits at Age 62
• 7 GOOD REASONS to File...
Average Retirement Savings by Age 60. Are You Almost Ready to Retire?!?
• Average Retirement Sav...
The BEST AGE to File for Social Security Retirement Benefits
• The BEST AGE to File f...
3 Social Security "Little Known Facts" That Are REALLY Important
• 3 Social Security "Lit...
Disclaimer: this video is for educational and entertainment purposes only and is not meant to be a substitute for legal, accounting, tax, or professional advice. If you have any specific questions about any legal, accounting, tax or other professional service matter you should consult the appropriate professional services provider.
Very helpful. You can add Colorado to the list. Effective January 1, 2023, Colorado no longer taxes Social Security income.
Very thoughtful video, especially for lower income retirees.
Thank you, and yes, it is always great to see YOU!
After listening to this video and reading all the comments, I'm about 1000% more confused than I've been in years. Thanks! Clear as mud!
Use tax calculator every year to figure this stuff out. Use your estimated numbers of retirement, what your goal is
This will help you decide between when to take Social Security and when to contribute to a Roth and or traditional
I know right? After 2 minutes in, my head starts to spin, and I considered myself a fairly intelligent person, being a bookkeeper & retired as data analyst, and the this subject matter still boggles my poor, feeble mind. God help us seniorly citizens 😊.
Don't worry, this video doesn't seem to be very helpful if you're near or at retirement age. This is when you still have at least a couple of decades left and want to plan ahead, and also if you're lower middle class or lower with minimal retirement savings and income.
Just have a good cpa do your taxes, and they'll reduce your tax burden as the law allows. If you didn't already understand in a Roth IRA, or have investment properties or a significant mortgage, I didn't think this video helps you much from what I can discern. Just don't wait til we're giving you flowers to try collecting. It all depends on your unique situation, which is why you should get off UA-cam and find a professional.
Everyone else, talk to your financial planners now, you have a few more questions to ask.
Great video. As someone who does their own complicated taxes, I understood it all. I’m glad you mentioned rental properties and depreciation. It often makes it look like we’ve lost money each year when we actually have money coming in just fine. This is GREAT for retirees! Plus, having held onto a rental property for many years, the equity has built up there just like own home, so we’ve got several pots of money available if we need them later in life. I encourage younger viewers to consider investing in rental properties, especially ones near you (not in a distant state!).
Very thorough presentation. TYVM
Thank you for this content. Helpful, as always.
I retiring at 62 this 2022. Not waiting 70 coz i probably wont make it then. I dont might paying taxes as long as i see the road i drive always are well paved then i know my taxes is working for me. Thank you !!
Thank you for your videos. They are very helpful.
Really good insight.
I love your tax examples on the blackboard!
Always informative.. 👍
Interesting information. Thanks for sharing
Thanks for this information. I would like to see the very specific calculations for year relevant bend points, year by year calculations and other variables.
Always like your videos thanx!
Thank you!
All very good. May I also point out that getting out of debt during your income years reduces the amount of money needed in retirement so you can stay below the taxable threshold.
extremely good point. I can live quite nicely on my SS...if I have no payments like a house payment.
I want to build a diversified portfolio based on my personal income. I am easily triggered/highly emotional, which could be detrimental to my portfolio. I hope I am a patient and systematic person. day trading is not for everyone and multiyear holding is not for everyone. I know my strengths that's why I need proper guidance to be able to venture>>>
Exactly what I plan to do. Zero debt years ago, pay-as-you-go lifestyle and use savings as a hedge against rising future costs and emergencies.
Thank you for your expertise Jeff! 😁👍
You bet
@@HolySchmidt You mean to tell me that the only comment you can make after all these people have concerns on this topic is one who thanks you for your expertise is a five letter response, "you bet". Geez, oh Pete.
Good straight forward content.
Thanks Bill. I work hard to make sure that some of the ‘isms out there make sense.
Bottom line is seniors who make it to retirement and who have paid taxes all their lives and are earning less than 60k a year should be exempt from paying any taxes. Government should target Amazon and get them to pay their fair share of taxes.
Seems like a great idea...until I realize that companies do not really pay taxes. By that I mean their tax burden is an expense and like all expenses it gets factored into the price of the final product. So the _consumer_ pays for it.
@@beerbrewer7372 Exactly!
@@notpublic8961 Yea ok..what ever you say....you're the only one with their finances in order.
@@notpublic8961 Lol...ok will do.
NEVER HAPPEN.. Oligarchy will CRUSH YOU and use you bones for DOGY TREATS
Thank you, sir!!
Great information!! I do have a few questions though.
don't look for answers on here
Great video. As someone who does their own complicated taxes, I understood it all. I’m glad you mentioned rental properties and depreciation. It often makes it look like we’ve lost money each year when we actually have money coming in just fine. This is GREAT for retirees! Plus, having held onto a rental property for many years, the equity has built up there just like own home, so we’ve got several pots of money available if we need them later in life. I encourage younger viewers to consider investing in rental properties, especially ones near you (not in a distant state!).
According to 2021 IRS transcript our income for that year was : $17,200 in wages (wife) plus $19,800 Social Security payments ( me & wife). It makes combined income in amount of $27,100. We have $4,900 "leeway" to add some interest e.t.c. and still pay no federal taxes on SS benefits (nor federal taxes at all). This year we purchased $40K worth of I-bonds ( $20K in "real purchase" and $20K as mutual gifts) . So, we can redeem them in 2023 @ ca. 8% interest without a problem.😀
Thank you.
Of no help to me but great that you are helping many.
Thanks Young for the comment. Most of the channel is for people already in retirement so take a look around and if you want me to talk about anything please let me know.
Holy Schmidt! I was ready for a deep, deep math... 😊
The sstax link you reference is a dead end.....thanx
Jeffery: Fine job as always. Thanks
Thanks @BearWolf21 . I have some great stuff coming! I have been in the Cave for the last few weeks working to step up the content.
I'd like to hear more about the rental tax breaks!
Schmidt, you always deliver.
All he did was deliver more confusion.
Thank you
The North Dakota Legislature eliminated state income tax on Social Security benefits during a special session in November 2021. So, you can add ND to the list of states that do not tax Social Security benefits.
It's appaling that any SS payment is taxed. We are all forced into it, it's funded by your tax payments, there is no investment return and payments are extremely low compared to private retirement accounts. And they have the nerve to tax it!!
That was Ronald Reagan’s doing!
You will get back FAR MORE from SS than you put in unless you croak out early. I paid about $104,000.00 in SS taxes over my career, with employers matching the same. I will get it all back in 59 months. I expect to hit at least 100, over 1.1 million in payments back to me, with increases for inflation. I don't mind paying $942. in tax every year. It is only those who have big pensions or investment income who get hit hard.
@@christinelachance8012 Assisted by - Senator Joe Biden!
@@TheAzmountaineer …Hardly! Biden was not a part of the commission formed by republicans under Reagan. The vote was 89-9…
@@christinelachance8012 He sure didn't vote against it. Biden was one of 88 senators who voted for it. That's an assist. Then in 1993, he also voted to add a bracket for the Clinton-backed bill for an increase up to 85%. Not a single Republican voted for that one. That's another assist for Joe.
Wow this video was awesome . This guy did all kinds of talking but I really didn't learn ishhh. He managed to do all that talking while it teaching swuat.
I think it is about criminal that we have to pay taxes on Social Security income.
Criminal? What law does it break, making it a crime?
@@suzanneemerson2625 You so funny
Yes a Roth is a great planning tool for some people. But most people pay less tax in retirement.
And for many investors a traditional is great to take advantage of the lower tax brackets and then you use a Roth for the rest. It's not an either or but a combination of the two that works well for many
Hi California doesnt tax Social Security. I don't see it on your list. Great videos im addicted. Thank you for this service!
CA absolutely taxes SS. Don’t be fooled.
Thx for the vid
I used to know a William McCaslin when I was in the Navy.
@@Welder-4956 Wrong one, I was AIR FORCE, E-4
The link to your SSA tax calculations doesnt work (404 page not found). Is there a better one to use? Please advise. Thx!
QUESTION: Are pensions (such as: military or federal/state) taxable or considered income to calculate your SS tax? I love your show ! Thank you for all this great INFO !
Pensions are usually taxable income.
Yes
Any pre-tax monies factor into your MAGI for tax purposes.
Helpful
Looking Good 😌
Hello... I do not see that spreadsheet you mentioned for the tax calculation. Even when I searched your website. Thank you
Good info, thanks! It seems that minimizing SS tax runs the risk of over-optimization, where you tweak one number at the expense of others. Reduction of the overall, lifetime tax burden is a step in the right direction.
It doesn't help me at all since my pension already over 44,000. I have to pay 85% of SS. Traditional IRA is tax free when you contribute. If I buy Roth, I lose the benefit of tax free. Just the matter of paying early or later.
I would not complain about a 44k pension
@@Dsuji245 crying all the way to the bank. There are plenty of people living only on ss.
Is it the same for SSDI ?
Thanks for the videos!!
When I view my "SS Retirement Calculator" can I correctly assume the 8.7% COLA is not included. So if it estimates $1000/mo benefit It should be $1087.00. Right?
I am interested also in info about double taxation treaties for either Uk/USA or USA/Spain. Also for a long term green card resident who leaves the USA for retirement
Having trouble finding that spread sheet you mentioned that is on your web site?
Collect state income tax on Social Security payments to at least some beneficiaries,
Colorado,
Connecticut,
Kansas,
Minnesota,
Missouri,
Montana,
Nebraska,
New Mexico,
North Dakota,
Rhode Island,
Utah,
Vermont and
West Virginia
Good morning Mr. Schmidt. I was wondering if I'm paying into my S.S. I work for a company that gives us a K1. So we're basically contractors. I get a paycheck twice a month. So I have steady income. When I pay my taxes at the end of the year, am I paying S.S. with some of the taxes I pay or is it all going to Federal Taxes? If I'm not paying any S.S. how can I make sure I am paying S.S?
Good info. The link to the worksheet doesn't work.
Any mention of income limits precluding a ROTH?
Is your calculator updated each year?
@HolySchmidt I live in a state that does not tax social security. My question is do I have to report it? I just moved here. Thank you.
Great to hear you. Reductions are good if you have IRA's from long ago. I have stock that went bank rupt 6 years ago. yikes
In short, if you make too much and do not have 401k etc, Social Security is 85% taxed. Is that correct?
I’m in Washington state. What would happen with my SS and pension? Thanks
As a married couple is the traditional income also you spouse's income who is not drawing ss?
I thought municipal bonds were tax exempt, even of held in a taxable account. What am I missing?
Did I misread a booklet from the Social Security Administration that stated I can no longer contribute to an HSA after I enroll in Medicare?
Do you have a paper rear
Are those amounts AFTER YOUR STANDARD DEDUCTION, or just flat out?
A quick Google search says that CA does not tax social security income yet it's not on the list. Am I missing something? Thanks.
I appreciate the useful information. What does it imply when we say that 85% of SSN benefits are taxable? Does this entail that 85% of SSN benefits will be considered income and subject to both federal and state taxes? So, in 2022, if our total income is under $83,550 for joint filing, I 'll pay 12% federal tax, right?
SS benefits, not SS Number. I don't know where people are getting that from.
Thank you for all the helpful information about social security benefits. I’ve taken my SS benefits since I was 62. I’m considering withholding my SS benefits until 70 years old when I reach my full retirement age. I hope you’ll have a video about withholding social security benefits. I haven’t seen this topic addressed largely on UA-cam. I think there’re many people in the same boat as I who is looking for a better understanding about this matter. I hope you’ll have a video on this topic soon. I appreciate your help.
He only told you half the story! Taxable income does not mean you pay taxes! Take the money and run! Its another 8yrs to break even after FRA!
just take the money and run. It's not gonna be there in the future.
What happened to the sstax spreadsheet on your website?
Couldn't get to a spreadsheet on your site...
Reviewing the list of states in your description, I don’t understand why Alaska is not marked “no state income tax” like similar states.
Can you convert traditional 401(k) into a Roth little by little, year after year to lessen the impact of conversion?
Yes and it's the best way to do it so you don't get yourself in a higher tax bracket as well!
Thanks much for this video! It's a big help!
At 4:46, wouldn't 56,600 - 32,000 be 24,600 instead of 44,000? I dob't see where you came up with 44,000.
Good information!
@Laurence Egerton thank you for the kind words
Which state would be cheaper to retire in tax wise if renting, California or Utah?
If my spouse draws disability, how does that affect us? The disability income is non-taxable, so would that just reduce the combined income?
Question: once you are taking money out of your profit sharing plan, is it better to roll over your profit sharing plan to an IRA ? Why?
Link to SS Tax spreadsheet still not working. Is this intentional?
Why isn’t Virginia listed under a no tax state? When I looked it up on line it said they do not tax social security. We are thinking of moving there so I’d like to know. Presently we live in Pennsylvania.
Is sdi taxable too?
When you receive retirement money from Florida Retirement System some people say that you do not have to pay taxes on it since the taxes are already taking out. I still have them tax out because I was told it is considered earned income and you have to pay taxes. What happens to the money that is not collected from an FRS account? Does it just go to the government?
If you have savings that you have already payed taxes on (normal savings outside 401K or IRA), you can use that to supplement other taxable income and keep yourself in or near a zero tax bracket. I anticipate having a zero tax bill for many years into retirement until my minimum distributions push my “income” up.
That's my plan exactly.
Same here
But isn't savings a money loser because low/no interest and inflation?
@@toddb6576it’s nice to have cash when you need it instead of 22%+ APR on a credit card or have to tip into your tax-advantaged account when you weren’t planning on it.
Tell us more about hsa how do we benefit from an HSA if we can't access the money in it except for medical exspenses
does VA disibilty count as tradition income?
NO
Tried to see the worksheet on your website and couldn't find it. Can you help?
Hello...can't find the spread sheet I get error 404. I copied and pasted link from above. Any help appreciated I struggled doing that calculation and still don't know if I did it right.
Wish at 8:18 you had mentioned that once you sign up for Medicare you no longer get the HSA tax advantage. Dont know why this isn't made clearer by anyone but I got thoroughly screwed because of it. It's this really common knowledge to all? How did I miss it?
I'm 75 & only paid on 66% of my & m y wife's SS benefits from age 62 to 70 1/2, when the Gov.t forced us to take the RMD (required minimum distributions) from our IRA"s, 401K's!
Now, even though we essentially only have that extra, unneeded money, we must pay on 85% , i.e. the maximum on Soc. Sec. benefits! Also, we lost the "enhanced STAR' reduction for
seniors on our real estate taxes, due to that few thousand dollar increase in total income. They never told people in the 1980's, ( WHEN IRA'S, 401K'S, 403B'S, ETC) started, that they
might cause a loss in income, from other souces, in the future!
Don't forget about the IRMA tax. It will make your Medicare premiums go through the roof. It will also add a tax to your part D even though you are not using part D.
This is quite true. We sold our farm and
Ended up not only paying a hefty tax in Fed and state but also was penalized at the tune of $1000 per month out of our social security for an entire year. We are in our seventies so this is significant loss. It’s not fair r easonable.
Does income from an Army retirement count as “traditional income” and factored in “combined income” for tax purposes?
Great channel. Excellent topics and advice. However, one observation. Has anyone noticed how similar Holy Schmidt is to Dr. Todd Grande? I did a double take when one immediately followed the other on my playlist.
I wish I had paid more attention to things like this when I received life insurance money from my husband. A financial advisor at my credit union had me open a traditional IRA, and it really didn't help me as far as I can tell. Unfortunately that entire account is empty now, partly because I had to pay so many taxes.
When you say "taxable income", is that your income after writing off things like property tax?
I did not read all the comments to check for redundancy but I wanted to mention contrary to your above list that the state of Alabama does indeed have a state income tax.
But do they tax social security? He isn't saying that they don't tax other income.
What if I move to completely different country?
My mom's accountant depreciated her rental property for 28 yrs. The local property values were quite high when she finally sold her rentals. She owed $55,000 in back taxes. The loan to pay the IRS (because of her age) required a monthly payment of $1,000. Be careful about depreciation... if you're maintaining your rentals in a robust market, depreciation might not actually be happening. !
It probably isn’t if you are maintaining the property. Good point to note. The tax break is good but your basis goes down
Each year you are required to depreciate rental real estate per IRS. She's lucky the values were high when she sold but it sounds like your mom kept taking the profits before she sold. Possibly the rental was refinanced and she was using the proceeds to live on.
I don’t believe depreciation is a requirement. We own a rental apartment and I have never took the depreciation for fear of owing money when I sell it. I would assume that once you sell, you would owe back those dollars to IRS.
I don't weep for people who own multiple properties. I can't afford to buy one.
In California the tax base can be stepped up upon the passing of the owner, they just have to die unfortunately. I’m in this process currently on an inherited home the family has had for years and can’t wait to get out of the rental business before California strips away more of the property owners rights. I actually never heard of anyone not taking depreciation on a rental property!
Everything you’re talking about doesn’t apply to my situation. I retired at 62 , started receiving my SSI in May 22 one month after my birthday. My SSI is only 1330 $ Thad including the cola added this year. I also reciebe 583$ from my Union retirement. You talked about bigger income , I think as interested to hear from you specifically whether on my income I need to pay taxes? So now I sent you a message or question Do I still need to file and pay taxes from my low income SSI? Thank you in advance and if you find time to read my message!!!
Married is not an IRS filing status. Married Joint and Married Separate are. Which one are you using in your example?
cannot find the spread sheet on your web site to calculate this for my own situation.
I also could not get that spreadsheet. It errored out
Is the $25k for singles after your standard deduction?
I have always said, its not what you make but what you owe!!!
I live in CA and SSA retirement income is exempt! Why didn't you point that out? 😎
Shut up. FL...the land of anti vaxx.
What happen to the link file?SSTax?
Alaska has no state income taxes as well