Does withholding taxes from Social Security checks vs. paying annually affect total tax amount?

It's ultimately the same tax amount, but having taxes withheld is basically giving the government an interest-free loan. I've always opted to pay quarterly because I can keep that money invested until I actually need to pay it. The only real benefit to withholding is you don't have to remember to make payments - it's automatic. But mathematically you're better off paying later rather than sooner if you're even somewhat financially savvy.

The AMOUNT of tax is identical either way, but there can be penalties if you don't pay enough throughout the year. The IRS has a "safe harbor" rule - you need to pay at least 90% of this year's tax OR 100% of last year's tax (110% if your AGI was over $150,000) through withholding or estimated payments to avoid the underpayment penalty. If you're concerned about figuring out quarterly payments, having SS withhold is just simpler. You can use form W-4V to request withholding at 7%, 10%, 12%, or 22% of your monthly benefit.

I tryed both ways and honestly its EXACTLY the same amount you pay eventually!! The only difference is do you want smaller SS checks all year OR a big tax bill in April??! I personally HATE owing money at tax time so I just have them take out 12% and im done with it. peace of mind is worth something too ya know

Be careful with this! If your combined income (adjusted gross + nontaxable interest + 1/2 of SS benefits) exceeds certain thresholds, up to 85% of your Social Security becomes taxable. In my case, I didn't withhold enough my first year and ended up with a HUGE tax bill AND a penalty for underpayment! It was a nightmare. With your part-time income, you're probably right on the edge of having some of your SS benefits taxed. Have you calculated your provisional income? That's what determines if/how much of your SS is taxable.

Have you tried calling the SSA to discuss your withholding options? I was trying to do the same thing last month and kept getting stuck on hold for HOURS before being disconnected. Finally, I tried a service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in under 10 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent walked me through my withholding options and helped me understand exactly what percentage made sense for my situation. Way more helpful than trying to figure it out alone!

Financial advisor here. The math is identical either way, but there are behavioral and cash flow considerations: PROS OF WITHHOLDING: - Forced savings (no surprise tax bill) - Set it and forget it - May help avoid underpayment penalties PROS OF PAYING LATER: - Better cash flow throughout the year - Can invest the money until tax time - More control over timing For most retirees on fixed income, I recommend withholding for simplicity unless you have a specific cash flow need or are very disciplined with setting aside tax money.

theres actually a form you need to get - i think its W4-V or something close to that. You pick the percentage you want taken out. My sister had a heart attack when she got a $4000 tax bill her first year on SS!! dont let that happen to you!!

I'm still confused about how they tax Social Security in the first place. I thought we already paid taxes on our earnings before paying into the system?? So isn't this double taxation?? And with these new tax brackets I'm hearing about for 2025, will that change how much of my benefits are taxed? Sorry to hijack your thread but this whole system is so confusing.