Savvy Senior: What caregivers should know about Medicare
Jim Miller,
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Dear Savvy Senior,
I understand that a portion of my Social Security benefits may be taxable when I retire. Can you tell me how to calculate this?
Ready to Retire
Dear Ready,
Whether or not you’ll be required to pay federal income tax on your Social Security benefits will depend on your income and filing status. About 35 percent of Social Security recipients have total incomes high enough to trigger federal income tax on their benefits.
To figure out if your benefits will be taxable, you’ll need to add up all of your “provisional income,” which includes wages, taxable and non-taxable interest, dividends, pensions and taxable retirement-plan distributions, self-employment, and other taxable income, plus half your annual Social Security benefits, minus certain deductions used in figuring your adjusted gross income.