Should I have taxes withheld from SS benefits at FRA if my 2025 income will be unusually high?

Tax withholding from Social Security is completely optional. When you apply, you'll complete form W-4V if you want withholding (at 7%, 10%, 12%, or 22%). If you choose no withholding initially, you can always add it later by submitting that form. Keep in mind though - even without withholding, your SS benefits may still be taxable if your combined income is high enough (which sounds likely in 2025 with that profit-sharing payout). You might need to make quarterly estimated tax payments instead. As for the application itself, at FRA it's pretty straightforward. Just make sure you have: - Your original birth certificate or passport - Your most recent W-2 or tax return - Bank info for direct deposit The biggest mistake I see people make is not checking their earnings record before applying. Log into my.ssa.gov and verify all your earnings are correct before you apply.

dont overthink it! i started my ss last year and it was way easier than i expected. took maybe 30 mins online. the tax thing is optional like they said. i didn't do withholding and just pay quarterly estimated taxes instead.

Just wanted to add something else to watch for - if you're still working in any capacity when you apply at FRA, make sure you tell them. At FRA there's no earnings limit so it won't reduce your benefit, but it's important they know your current employment status. Also, are you married? If so, have you looked into spousal benefit strategies? Even at FRA there can be advantages to certain filing orders if your spouse is also near benefit age. The tax withholding question is smart to consider with that profit-sharing payout. Up to 85% of your SS benefits can be taxable if your combined income (adjusted gross income + nontaxable interest + half of SS benefits) exceeds certain thresholds. With a $45K extra payment, you'll likely hit that 85% level in 2025.

Based on my experience, here's what you should know: 1. Regarding taxes: Withholding is 100% optional. You can elect to have nothing withheld and handle your tax liability separately, which makes sense in your situation with the one-time payout. 2. Application tips: - Apply 3 months before you want benefits to begin - Have your birth certificate, SSN, and bank info ready - If you were in the military, have your DD-214 - If you've been married/divorced, have those documents too 3. One mistake to avoid: Not understanding how your benefit amount changes based on your claiming month, even within your FRA year. The month matters! 4. Since you mentioned your spouse is younger, you might want to coordinate your claiming strategies. There could be advantages to specific approaches depending on your relative benefit amounts. If you're having trouble getting through to SSA to discuss these details (their phone lines are awful), I used Claimyr (claimyr.com) to connect with a rep without the usual wait. They have a good demo video here: https://youtu.be/Z-BRbJw3puU. Saved me hours of frustration when I needed to ask specific questions about my claiming strategy.

Watch out for retroactive benefits!!! At FRA you can request up to 6 months of retroactive benefits but IT'S NOT ALWAYS A GOOD IDEA. They don't explain this well. Taking retroactive benefits means your monthly amount could be lower forever. They just offer you a lump sum and don't make it clear you're permanently reducing your benefit! Also if you have any self-employment income make SURE you report it correctly or they'll come after you years later for "overpayments" plus interest. SSA is a bureaucratic mess - document EVERYTHING.

For ur taxes - my brother had same issue with a big 401k withdrawal the yr he started SS. he just didn't do withholding and instead made quarterly payments to IRS that year. next yr he added withholding cuz his income went bak to normal. btw the online application always crashes for me i had to do mine by phone!!! took forever to get thru

I'm a retired financial advisor who specialized in retirement planning, and I'd like to add some clarity: 1. Tax withholding from Social Security is completely optional. You complete Form W-4V if you want withholding, but given your unique income situation in 2025, skipping withholding and handling taxes separately makes sense. 2. Be aware that up to 85% of your benefits may be subject to federal income tax if your combined income (AGI + nontaxable interest + half of Social Security benefits) exceeds $34,000 (single) or $44,000 (married filing jointly). 3. For married couples, there's rarely any sophisticated strategy needed if both plan to claim at FRA. The advantage of spousal coordination mostly comes into play when one spouse claims early or one delays past FRA. 4. One mistake people make at FRA is not considering whether delaying benefits further might be advantageous. Each year you delay beyond FRA (until age 70) adds 8% to your benefit amount. With increased longevity and the guaranteed inflation-adjusted return, delaying can be valuable for some people.

I just went through this process in January! The application was straightforward, but as others mentioned, check your earnings record first. I found a missing year from 2002 that I had to get corrected before applying. For your tax situation, I'd recommend talking to a tax professional specifically about managing the tax impact of that large profit-sharing payout. There might be ways to offset some of that income or spread it across tax years depending on how it's structured. Also, don't forget to consider how your SS benefits might affect your Medicare premiums in 2027 (they look at your income from two years prior). That profit-sharing payout could potentially bump you into a higher IRMAA bracket for Medicare Part B and D premiums for that year.

As someone who just went through this process last year, I wanted to share a few additional tips that helped me: 1. **Document timing**: Even though you're at FRA, the exact month you start benefits matters for your first payment. If you apply in March when you reach FRA, you can choose to start benefits that same month or delay to a later month if needed. 2. **Direct deposit setup**: Have your bank routing and account numbers ready. Paper checks are still an option but direct deposit is much more reliable and faster. 3. **Medicare coordination**: Since you mentioned you're already enrolled in Medicare Parts A & B, make sure your Medicare and Social Security records are properly linked. Sometimes there are glitches that can cause issues later. 4. **Keep copies**: Save PDFs of everything during the online application process. The confirmation numbers, your completed application, everything. The system occasionally has hiccups and having your own records is invaluable. For your specific tax situation with that $45K profit-sharing payout, starting without withholding and making quarterly estimated payments definitely sounds like the smart approach. You can always add withholding later in 2026 when your income normalizes. Good luck with your application - it really is more straightforward than the horror stories make it seem!