5 Tips to avoid taxes on social security income

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1) Delay collecting your benefits

You may be able to avoid paying taxes on your Social Security benefits for the time being by delaying receiving them until you reach full retirement age.

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When you wait to file for benefits, you'll receive a larger monthly payment when you do begin receiving them.

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2) Work less or do not work in retirement

Part-time work can increase your Social Security tax liability. It will be not good to quit a job you like — or need — to lower your taxes. 

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If the work is a low-wage pain in the neck that only gives a tiny financial advantage, resigne so you may reduce your income and lower or eliminate Social Security taxes.

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3) Avoid Municipal Bonds

Many people use municipal bonds to minimize their tax burden. Taxes on interest on these kinds of bonds are often not applicable. 

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However, municipal bond interest is factored into the formula that determines whether Social Security benefits are taxable.

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4) Withdraw money from ROTH account

Uncle Sam will tax your regular IRA or 401(k) in retirement. After postponing taxes on donations for years, you must pay when you withdraw money.

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Avoiding this taxation can be done by withholding only the amount of money that is mandated by law — known as the "necessary minimum distribution" (RMD)

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5) Distribute RMD to charity

Donating to charity is great. You can reduce the likelihood that your Social Security check will be taxed by helping others. 

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It is possible to give up to $100,000 of your annual statutory minimum distribution and avoid income taxes if you are at least 70.5 years old.

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