# Federal withholding on SS



## QuickSilver (Nov 22, 2014)

Just applied to get my SS benefit started.. They asked how much Federal tax I wanted withheld.. the choices were 5--10---15 and 25%.  I wasn't sure what to do.   I chose 10% as it is figured on the entire amount, but you are only taxed on 50% of your benefit.  What does everyone else have withheld?   I can go back and change it if I need to.


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## Jackie22 (Nov 22, 2014)

This must be something new, QS, I don't remember doing that, I don't think any tax is held out of my SS.


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## JudyB (Nov 22, 2014)

QuickSilver said:


> Just applied to get my SS benefit started.. They asked how much Federal tax I wanted withheld.. the choices were 5--10---15 and 25%.  I wasn't sure what to do.   I chose 10% as it is figured on the entire amount, but you are only taxed on 50% of your benefit.  What does everyone else have withheld?   I can go back and change it if I need to.



No tax withheld here either, and i've been getting SS since 2005.  Not necessary when income is as low as mine was. lol  Yeah you really need to investigate further QuickSilver.  Give them a call.  (SS) Haven't checked where you are from but they're very helpful, here in the states anyway.  Good luck with that.


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## QuickSilver (Nov 22, 2014)

Well, I'm still working and my SS check may very well push me up into a higher tax bracket, but I don't know yet.  So I'm having 10% withheld now.  which will acutally be 20% as only 50% of your benefits are taxed.   I'm in Illinois and there is no State tax on SS.    When we go to our accountant to have our taxes done, I'm going to have to see where we are and may have to adjust my withholding based on what we end up paying.  I was just wondering what everyone else was having withheld if anything.   I know that if your income is low, you don't pay taxes.  My SIL doesn't even have to file, but SS is her only income.


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## Son_of_Perdition (Nov 22, 2014)

QuickSilver said:


> Just applied to get my SS benefit started.. They asked how much Federal tax I wanted withheld.. the choices were 5--10---15 and 25%.  I wasn't sure what to do.   I chose 10% as it is figured on the entire amount, but you are only taxed on 50% of your benefit.  What does everyone else have withheld?   I can go back and change it if I need to.


I changed mine to 7% although I'm not taxed in my state on any of the SS earnings you are required to pay federal tax.  Federal tax is based upon the total earnings outside of SS and then it is prorated.  

I use the withholding as sort of a forced savings account.  They used to say to adjust your withholding so you come out even with taxes, but since the savings interest you earn at a bank is an insult I wait until my refund and deposit it into my emergency funds.  I also claim 0 exemptions on my fed and state withholding on my pension.  My pension state withholding is enough to cover the tax liability.  I've been doing it for the 5 years I've been retired and have build up enough to make it worthwhile.



> From the Social Security Administration website
> 
> You can ask us to withhold federal taxes from your Social Security when you apply for benefits.
> 
> ...


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## QuickSilver (Nov 22, 2014)

I also have three small pensions..  I have Illinois State tax withheld, but the checks are too small to take Federal tax I guess, because even though I filled out a W4 they do not take Federal Tax.. just State..  So I've increased the amount withheld out of my paycheck from my employer..


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## rkunsaw (Nov 23, 2014)

I don't have any taxes withheld from SS or my pension. Neither is taxable unless you make over a certain limit of which I don't recall the amount.


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## QuickSilver (Nov 23, 2014)

Yeah....  I can pretty much KNOW I make over that amount.


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## Ameriscot (Nov 23, 2014)

My SS is not huge as I only worked in the US for 17 years and never made a big salary.  So no tax due.  However, if it was large enough to pay a tax on, I would have to pay it to the UK government.  Same thing for my UK pension - I'd have to pay the tax to the US government if it was large enough. My tax forms will be fun next year.  layful:


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## ClassicRockr (Nov 23, 2014)

From the IRS website concerning taxable SSI:

How much – if any – of your Social Security benefits are taxable depends on your total income and marital status.

When I first started my Early Retirement SSI, when I turned 62, I was asked if I wanted tax automatically taken out of each months payment or not. My wife didn't want to mess with trying to figure out the amount of tax to be taken out of my SSI, so we chose the "automatic". BTW, we file jointly as a married couple, so "household income" comes into play, which means that my SSI and her salary are added together for taxes. She makes more that was is allotted for no tax to be taken out of my SSI.


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## QuickSilver (Nov 23, 2014)

ClassicRockr said:


> From the IRS website concerning taxable SSI:
> 
> How much – if any – of your Social Security benefits are taxable depends on your total income and marital status.
> 
> When I first started my Early Retirement SSI, when I turned 62, I was asked if I wanted tax automatically taken out of each months payment or not. My wife didn't want to mess with trying to figure out the amount of tax to be taken out of my SSI, so we chose the "automatic". BTW, we file jointly as a married couple, so "household income" comes into play, which means that my SSI and her salary are added together for taxes. She makes more that was is allotted for no tax to be taken out of my SSI.




I'm 66 so I have no limit on earning... My income is pretty high so I will be paying taxes.. I'm having 10% taken from my SS check.  I'm hoping it covers it.


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## Don M. (Nov 23, 2014)

Depending upon your annual income, up to 85% of your SS benefits is taxable.  Here are a couple of references you can use to figure out your liability.

http://www.ssa.gov/planners/taxes.htm

http://www.tax-brackets.org/federaltaxtable


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## QuickSilver (Nov 24, 2014)

Good info it's 85% for me...


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## Son_of_Perdition (Nov 24, 2014)

I was wrong


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## Son_of_Perdition (Nov 24, 2014)

my mistake


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## QuickSilver (Nov 24, 2014)

Son_of_Perdition said:


> Am I wrong?  I thought SS was based upon what your pension is.  They figure it so that you will receive 75% of your base pay prior to retirement.  I know you can supplement that with IRA's, 401K's and personal savings interest/dividends. So if your pension is over $44,000 then you will receive less SS and 85% of that will be taxed.
> 
> You will also be taxed on the IRA's and 401k's at your normal tax rate up to 35% plus any state tax.  If you have ROTH IRA's there will be no tax on those.  If you are not taxed on SS in your state then it would benefit you to have a higher SS income with lower withdrawals from your IRA's, 401k's and interest/dividend income than it would be to have higher pension benefits.  That being said all reportable income over $44K will tax 85% of your SS that portion is reported in the states where you have your SS taxed.
> 
> It's called creative accounting and the only way you can beat it is not having higher income from pensions, retirement accounts and not having your SS taxed by state.  A catch 22 situation.  The more you make the more you pay the government and the more people you support through welfare and Medicaid.  And you wonder why the rich want to create shelters, off shore accounts and loopholes for their income.



What pension are you talking about?  SS is based on a formula of your age, your income over your working life and if you have paid into FICA.  They then assign you an amount based on all that.  It doesn't matter if you receive private pensions and if you work full time provided you are at your full retirement age.


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## Son_of_Perdition (Nov 24, 2014)

QuickSilver said:


> What pension are you talking about?  SS is based on a formula of your age, your income over your working life and if you have paid into FICA.  They then assign you an amount based on all that.  It doesn't matter if you receive private pensions and if you work full time provided you are at your full retirement age.


I was wrong you are right.


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## rkunsaw (Nov 24, 2014)

WRONG,WRONG AND STILL WRONG. Pensions have nothing to do with social security. Social security is based on your thirty best years of paying into the system and your age. There are exceptions if you are disabled but in any case whether you receive a pension and how much does not matter.


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## Son_of_Perdition (Nov 24, 2014)

rkunsaw said:


> WRONG,WRONG AND STILL WRONG. Pensions have nothing to do with social security. Social security is based on your thirty best years of paying into the system and your age. There are exceptions if you are disabled but in any case whether you receive a pension and how much does not matter.



I stand corrected my pension was calculated with my SS to equal 75% of my average monthly wage.


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