In the Video above, Scott Farnsworth, Central Florida's Tax-Free Retirement Expert answers a frequently asked question: Are my Social Security benefits taxable?
"Most people are surprised to learn that Social Security is potentially taxable. It could be taxable at the rate of 85% of your normal rate, at 50%, or zero, depending on the kind of planning you've done. Which category it is, zero, 50, or 85%, depends on your provisional income. Now that's a constructed term from the Internal Revenue Code, and it basically sweeps in every kind of retirement income, including so-called tax-free income on state and local tax bonds. What it does not include are distributions from Roth IRAs and TRAs, Tax-free Retirement Accounts.
Now, if you're a married couple and your provisional income is below $32,000, there is no tax on Social Security. If it's between 32 and 44, 50% of your benefits are taxed. Above 44, 85% of your benefits are taxed. If you're a single tax payer, the limits are 25, if it's below 25, no tax. Up to 32, between those two, 50%. Above that, 85%."
Are my Social Security benefits taxable?