Are you collecting or about to collect Social Security benefits before you reach the full retirement age of 66?
Are you going to have business income while collecting Social Security?
If you said “yes” to both questions, you could pay taxes equal to 96.14 percent on your Social Security benefits. We suspect this would not make you happy.
Whoa, Explain That 96.14 Percent Tax!
Jan Smith, age 62, is married to Fred Smith. They are in the 25 percent income tax bracket and file a joint tax return.
Ms. Smith is self-employed, earning $24,160 in net self-employment income for the year. The $24,160 is $10,000 more than the $14,160 maximum early retirement earnings allowed by Social Security. Watch how Mr. and Mrs. Smith part with 96.14 percent of this $10,000 in ... Log in to view full article.