Income affects what you pay in social security tax.
In fact, you may be obligated to pay anywhere from 50% to 85% in social security tax on your benefits, including:
- Retired Worker Benefits
- Survivor Benefits
- Disability Benefits
- Old-age Benefits
- Spousal Benefits
However, this tax rate varies depending on your gross income which is why it is so important to have a plan in place before filing your taxes. Your other income streams affect how your social security is taxed, including:
- Interest Income
- Rental Income
- Dividend Income
- Capital Gains
- Retirement Distributions
- Annuities Distributions
But what if you change the way you other income and investments are taxed?
Every investment vehicle is taxed differently and qualifies as a unique type of income. There’s no blanket category that covers every type of income…
…except for ordinary income tax and you don’t want to pay the highest rate every income type!
To understand how your other income affects your social security tax rate you must understand how that income is being categorized and taxed, including your investment taxes and income taxes.
To minimize the tax paid on your social security benefits, you need a solid financial plan; one that’s flexible and blends your different tax types to keep more of your hard-earned dollars in your own pocket. Register for a free workshop or one-on-one consultation today.