How much is deducted from Social Security payment - taxes withheld before or after receiving check?

Taxes aren't automatically withheld from your Social Security benefits unless you specifically request it. The amount shown on your benefit estimate is the gross amount before any deductions. You have options: 1. Receive full amount and pay taxes quarterly or annually 2. File Form W-4V to request voluntary tax withholding (at 7%, 10%, 12%, or 22%) 3. Have Medicare Part B premium deducted (and Part D if applicable) Other possible deductions include Medicare Advantage premiums, any garnishments for things like unpaid federal taxes, child support, or student loans. Also, depending on your combined income, up to 85% of your benefits may be taxable.

my wife gets hers with 10% taken out for taxes and it works good for us. the medicare comes out too. better than owing a big bill at tax time!!

Keep in mind that whether your SS benefits are taxed depends on your "combined income" - which is your adjusted gross income + nontaxable interest + 1/2 of Social Security benefits. If filing single and combined income is: - Below $25,000: No tax on benefits - $25,000-$34,000: Up to 50% taxable - Above $34,000: Up to 85% taxable For married filing jointly, the thresholds are $32,000 and $44,000. If you have other income sources in retirement, you'll likely need to pay some tax on your SS benefits. The W-4V form lets you choose 7%, 10%, 12% or 22% withholding rates.

I see some confusion about tax withholding from Social Security benefits. Let me clarify: 1. The benefit amount shown on your statement is the gross amount before ANY deductions 2. Federal tax withholding is OPTIONAL - you must request it by submitting Form W-4V 3. Medicare Part B premium (currently $174.70/month for most people in 2023) is automatically deducted when you enroll in Medicare 4. If you have higher income ($97,000+ for individuals), you'll pay extra for Medicare (IRMAA surcharges) 5. Some states also tax Social Security benefits For accurate planning, estimate your total retirement income, determine what percentage might be taxable, then decide if voluntary withholding makes sense for your situation.

Just wondering - has anyone successfully reached SSA to ask these kinds of tax questions? I've been trying for WEEKS and can't get through to anyone who can help with my withholding form.

Just want to add something important that others haven't mentioned - if you're still working when you claim Social Security at 66 (before your FRA of 67), you'll be subject to the earnings limit. For 2023, that's $21,240 annually. They'll deduct $1 for every $2 you earn above that limit, which is a significant reduction that will show up as a deduction from your monthly payment. This is separate from the tax issue but important for accurate budgeting.

i was SHOCKED when i started getting ss and saw all the deductions!! nobody tells you this stuff beforehand!! between medicare and the tax withholding i chose, i get WAAAY less than what my statement said. budget accordingly!!!!

my brother just turned 66 and he didn't do the withholding thing and now owes a big tax bill he can't pay. definitely do the withholding!!!

As someone who just went through this process last year, I can confirm what others have said - the benefit estimate is the gross amount before deductions. Here's what I wish I had known: 1. Start with your benefit estimate, then subtract Medicare Part B ($174.70/month in 2024) 2. If you choose tax withholding, that comes out too - I went with 10% and it's been manageable 3. Don't forget about state taxes if your state taxes SS benefits One tip: you can change your withholding election at any time during the year by submitting a new W-4V form. I started with 7% withholding but bumped it to 10% after my first quarterly estimated tax payment was higher than expected. The SSA's online portal makes it pretty easy to track your actual payments and see the breakdown of deductions once you start receiving benefits. Good luck with your retirement planning!

This thread has been incredibly helpful! I'm in a similar situation planning for retirement next year. One thing I haven't seen mentioned yet is the timing of when deductions actually start. For Medicare Part B, does the deduction begin immediately when you start receiving Social Security if you're already 65, or is there a delay? Also, if you submit the W-4V form for tax withholding, how long does it typically take for SSA to process and implement the withholding? I want to make sure I have everything set up properly before my first payment to avoid any surprises or gaps in coverage.

This has been such an informative discussion! As someone who's been on Social Security for about 3 years now, I wanted to add a few practical points that might help with your planning: The Medicare Part B premium does get deducted automatically, but watch out for the annual adjustments - it goes up most years and they don't always give you much notice. I budget an extra $10-15/month cushion for those increases. For tax withholding, I started with 12% and it's been pretty accurate for my situation. The key is to run the numbers based on ALL your retirement income, not just Social Security. I use the IRS withholding calculator every January to double-check. One thing nobody mentioned - if you have any outstanding federal debt (old tax bills, defaulted student loans, etc.), they can garnish your Social Security benefits. This would show up as an additional deduction beyond the standard ones. Worth checking if you have any old obligations floating around. Also, keep copies of everything you submit to SSA. Their processing can be slow and sometimes forms get lost in the system. I learned this the hard way when my first W-4V took 4 months to process because the original got misplaced. Good luck with retirement planning! It's definitely more complex than most people expect, but once you get everything set up properly, it runs pretty smoothly.

I'm glad I found this thread! As someone approaching the same decision point, I wanted to add a perspective about quarterly estimated tax payments since that was mentioned earlier but not fully explained. If you choose NOT to do voluntary withholding from your Social Security benefits, you'll likely need to make quarterly estimated tax payments to avoid penalties - especially if you have other retirement income. The quarterly payments are due January 15th, April 15th, June 15th, and September 15th each year. The IRS generally expects you to pay at least 90% of your current year's tax liability or 100% of last year's liability (whichever is smaller) through withholding and/or quarterly payments. If you don't, you could face underpayment penalties. Honestly, after researching both options, I'm leaning toward the voluntary withholding approach. Having to remember four payment dates per year and calculate the right amounts sounds more complicated than just having it automatically deducted. Plus, as others mentioned, it helps avoid that big tax bill surprise in April. One resource that's been helpful for me is the IRS Publication 554 which specifically covers tax information for older Americans, including Social Security benefits. It breaks down the taxation rules pretty clearly if anyone wants to dive deeper into the details.