Did you know that there may be instances where you are taxed on your Social Security benefits? Depending on what kind of retirement accounts you are drawing from there is a risk that your benefits could add to your total income increasing the amount you must pay in taxes. Here is some information to keep in mind when considering what Social Security taxes are going to add to your overall tax bill.

What Accounts are Taxed?

If you are looking at having to possibly pay taxes on your Social Security benefits it is helpful to know what is going to add to that total. The good news is that anything held in a Roth IRA account is not able to be counted when it comes to federal income taxes.

The bad news is that money that is withdrawn from a 401(k) or a 403(b) account, a regular IRA and any other tax deferred retirement account can be counted towards federal taxes. Remember that for some of these accounts there is a mandatory payment that must begin at age 70.

Delay Benefits

One way to avoid this is to delay collecting your Social Security benefits until you are no longer withdrawing from your potentially taxable accounts. This helps you avoid any tax issues.

Another option is to convert your accounts over to Roth IRA accounts. This would lump them into the non-taxable category and prevent you having to worry about taxes.

Contact Stano Law group for any issues with social security benefits or retirement accounts.