Many Americans depend on Social Security to make ends meet each month. Depending on your total household income, you may be surprised that you owe taxes at the federal level on your Social Security benefits. Your state of residence will determine the taxes you owe on your Social Security benefits at the state level during retirement. If it wasn’t obvious, minimizing taxes on your Social Security benefits is like getting a raise on your retirement paycheck.
When your household makes enough money, the IRS will take its cut of your Social Security benefit via federal income taxes. The tax news is better for Social Security recipients at the state level. At this time, 38 states will not be taxing your Social Security. To state the obvious, that leaves 12 states that will tax your Social Security benefits at some level.
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