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Will You Still Owe Taxes on Social Security? New Deduction Helps Retirees—But If You’re Still Working, There’s a Catch
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How Social Security Benefits Are TaxedFirst, let’s go over how Social Security benefits are taxed in the first place.
At a 6% phaseout rate, your senior deduction would be reduced by $600 ($10,000 × 6%), leaving you with a senior deduction of $5,400 ($6,000 - $600).
The “Catch” If You’re Still WorkingIf you’re still working, your senior deduction may be reduced or not apply at all.
Starting the month you reach your full retirement age, working will no longer reduce your Social Security benefits.
To test the size of your Social Security benefit, enter your birthday and estimated earnings into the Social Security Administration’s Retirement Earnings Test Calculator.