Illinois Demslam Trump Administrator Cuts Social Security Staff
The Trump administration plans to fire nearly 7,000 Social Security employees, with elected Illinois officials fighting back.
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Last month, April was National Social Security Month. I hope you enjoyed it and attended many Social Security parties. If not, it probably took you a little while to understand the security we provide to at least tens of millions of Americans. For example, we provide 31% of our income to people over the age of 65 (this is again the 90th anniversary of the program).
But you may wonder how much income Social Security provides and whether that income will be taxed. Read some answers.
Average Social Security Benefits
The average monthly social security benefit for retirees was $2,000, or nearly $24,000 as of April. Obviously, that’s not that much. However, that’s just average. If you get above average work, you can expect an above average advantage. Still, even the biggest Social Security benefits aren’t as generous as you might think, and are $5,108 a month (just over $61,000 a year).
Set up my Social Security account on the Social Security Agency (SSA) website to give you a clearer estimate of how much you can expect to receive from Social Security.
It is also worth noting that social security funding is shrinking. If nothing is done, the retiree may be reducing benefits in a few years. President Donald Trump has also made or proposed several changes to Social Security that could undermine the outlook for Social Security. (However, there are several ways to enhance the program.)
Now, regarding the issue of taxation. The good news is that most states don’t tax Social Security benefits.
41 states do not tax social security
There are 41 states (along with Washington, DC) that do not tax Social Security benefits. Check if your condition is in it:
- Alabama
- under
- Arizona
- Arkansa
- California
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- main
- Maryland
- Massachusetts
- Michigan
- Mississippi
- Missouri
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- new york
- North Carolina
- North Dakota
- Ohio
- Oklahora
- Oregon
- Pennsylvania
- South Carolina
- South Dakota
- Tennessee
- Texas
- Virginia
- Washington
- Wisconsin
- Wyoming
These nine states impose social security benefits
The following nine states do Social Security benefits for taxes. If your condition is in it, don’t start hyperventilating. In many of these states, many retirees believe their benefits are either very lightly taxed or not taxed at all.
For example, in Montana, benefits are partially taxed based on income levels, with one person exempt from income less than $25,000, and those who are married and co-submitted are under $32,000. In New Mexico, most seniors do not tax benefits at all, as singles earn less than $100,000 and married couples who jointly submit income less than $150,000 are exempt.
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Yuta
- Vermont
- West Virginia
Don’t forget the federal government!
But the news isn’t all good because the federal government taxes social security benefits. Still, many retirees also escape the tax. Specifically, up to 85% of your benefits may be taxed by the federal government. The table below provides details.
Data Source: Social Security Bureau. * “Combined income” is half of adjusted gross income (AGI) and non-tax benefits and half of Social Security benefits.
Make sure you read the table correctly. I don’t see a 50% or 85% tax rate. 85% of taxes are never dropped due to taxes. Instead, these are part of your profits and could ultimately be taxed.
Big tax photos
It’s important to handle the taxes you face well, but don’t always consider your big tax picture and just focus on a tax of a kind. For example, states may tax Social Security, but may not tax income or property. Conversely, you may be happy to not pay property taxes in your state, but your state’s income tax rate may be high. After all, every state needs to generate revenue.
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