I retired last Jan 13. Just received the company's 2005 Incentive bonus and had Fed, Az state, SS, and Medicare deducted from the gross. I agree about the Fed and maybe the state, but why should the SS and Medicare be deducted, since I am 65 and receiving SS and Medicare? Chip
Because that's how Congress wrote the law.
-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us
snipped-for-privacy@ieee.org (chip) posted:
Taxes -- including Social Security and Medicare "fees" continue forever. There is no end to them, until you reach that other "certainty." Of course, if your total income is low enough, then you escape the "income tax" obligation. Bill
When I started doing taxes for the public many, many years ago, I asked the same question saying the lady was 78 and the answer from the IRS was they didn't care if she was 178 she still paid social security (medicare tax was included at that time). Missy Doyle
Because social security is not a fund, it's just a tax.
Stu
Because age is not a factor in ss tax liability. Heck, I'm drawing SS and I still have it withheld from my pay. And what's more, I pay income tax on 85% of my social security income. (Talk about something that is NOT fair!)
ChEAr$$$$, Harlan Lunsford, EA n LA
Your age and the fact that you are receiving social security benefits does not have any impact on social security taxes. If you have income subject to social security, you pay the social security taxes. It doesn't matter how old you are or if you are already receiving benefits, you owe the tax. If you should have a very good year and the covered income is higher than for one of the 35 years used to compute your benefit amount, SSA will recalculate that benefit for future payments. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans
I guess it's all a matter of perspective. I'd be dancing in the street if I had to pay tax on only 85% of my pension.
-- Phil Marti Clarksburg, MD
Yes, I wish more people understood the concept.
One fellow was telling me that the more he paid into social security , the more he would draw eventually. My reply was "not if you die first. Then not even your heirs get it because it's NOT your money!" ChEAr$$$$, Harlan Lunsford, EA n LA
Out of curiosity I ran the calculation this morning to see how much of my social security would be taxable if it were an ordinary pension. Using the simplified method it came out to 86.2%, so for me the 85% is a good deal.
-- Don EA in Upstate NY
Until, that is, your "factor" (240, 300, 360, etc) expires. Then it would be 100% taxable. Like several of my retired US civil service clients.
ChEAr$, Harlan Lunsford, EA n LA
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