# How to Legally Avoid Taxes on Your Social Security Benefits



## SeaBreeze (Jan 4, 2018)

I'm not receiving social security benefits yet, but here's an article about how to legally avoid paying taxes on them.  Any thoughts on this?   More here.  



> *Making your income nontaxable*
> 
> For  most retirees, the biggest source of taxable income is a retirement  savings account, often a traditional IRA or 401(k). The easiest way to  convert such income to a nontaxable form is to move it into a Roth account.  Roth IRAs are essentially the opposite of traditional IRAs: You don't  get a tax break on your contributions, but the money you take out of the  account is tax-free. That makes them perfect for retirees looking to  reduce their income taxes.
> 
> ...


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## mathjak107 (Jan 5, 2018)

doing roths early in your career are a no brainier as our career over decades usually sees our pay ramp up over decades . unless you start out in the highest brackets odds are your career average tax bracket will be lower than your retirement bracket . so roths early on can be worth doing .

conversions are a mixed bag . generally it is only worth converting if you have room left in the 15% bracket .

the other factor is your amount and plan for taking ss .

don't forget the tax gods give us a gift . if we are delaying social security and are living off cash , roth income and the zero capital gains brackets ,just using the standard deduction we can take 22k out of our taxable ira's  at no tax and 40k at 4.50% . in 8 years of delaying ss you can get 320k out with very little in tax .why would we ever want  to convert that and pay 15% ??????

so as you see the question as to converting is pretty complex .  usually short answers to complex questions are wrong answers .


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## OneEyedDiva (Jan 7, 2018)

mathjak107 said:


> doing roths early in your career are a no brainier as our career over decades usually sees our pay ramp up over decades . unless you start out in the highest brackets odds are your career average tax bracket will be lower than your retirement bracket . so roths early on can be worth doing .
> 
> conversions are a mixed bag . generally it is only worth converting if you have room left in the 15% bracket .
> 
> ...



I'm in a lower tax bracket but I'm glad I converted to Roths when I did. They make up 67% of my investments and the traditional IRA only 11%. I like not having to take out large amounts for my RMDs just because the government says I have to. I also like that if I decide I don't want to pay taxes on a (non-IRA) distribution or too much of a distribution, I can take from my Roths or a portion from my Roths. If the rule stands, my RMDs will be sent directly to my charity of choice to avoid paying taxes on those distributions. 

Seabreeze Having a Roth has not stopped my SS from being taxed.


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## mathjak107 (Jan 7, 2018)

roths work well where they can . but they are not for everyone .

take my son for example , he graduated law school and his first job  right out of school pays more than i ended my career with . so he already is in the top brackets since he is an attorney and his wife a cpa . a roth will not benefit them at this point . it is doubtful it will add much value too by retirement because they are already top tier earners .

me on the other hand would have benefited very well from them . but who knew all the things linked to retirement income back then ?  not me . any conversions i do will not pay , they will be in the next tax bracket from where we are accomplishing little . ss will always be taxed at our level of income so it is not a factor . all i care about is where our medicare premiums are and the brackets for our rmd's  and right now none will benefit from a roth conversion .


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## KingsX (Jan 7, 2018)

.

Social Security is only taxed if one's annual income [including half of your SS benefits] is over a certain amount.
I can easily live comfortably under that annual amount [for a single person the amount is $25,000.]  

Not only is my SS not taxed,  I'm able to withdraw from my taxable IRA tax free if I also stay under the IRS tax threshold,
which in 2018 will be $13,600 [single over age 65] and I don't even have to file a tax return.

Of course... all this refers to federal taxes... Texas has no state income tax.

Life is good.


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