Social Security benefits and tax withholding while working at 67 - will extra paycheck withholding count toward quarterly taxes?

You've actually done exactly the right thing! Increasing your withholding from your paycheck is one of the acceptable ways to pay estimated taxes on your Social Security benefits. The IRS doesn't care whether the tax comes from quarterly payments or paycheck withholding - they just want their money throughout the year rather than all at tax time. As long as your total withholding for the year covers at least 90% of this year's tax liability or 100% of last year's liability (whichever is smaller), you won't face any underpayment penalties. Many working retirees handle it exactly as you are doing.

my sister just went thru this exact same thing!!! the SS people r USELESS when it comes to tax stuff, always passing the buck. she ended up owing a huge bill last april because nobody told her anything about quarterly payments!!!! wish she'd done what you did with the extra withholding

I'm a retired CPA who specialized in retirement tax planning. Let me clarify some points: 1. Increasing your W-4 withholding absolutely counts toward your estimated tax requirements. The IRS treats withholding as if it occurred equally throughout the year, even if you just started the extra withholding in August. 2. For someone in your situation (working while collecting SS), withholding from your paycheck is usually more advantageous than quarterly payments because of the "even throughout the year" treatment I mentioned. 3. To avoid underpayment penalties, you need to have paid in either 90% of your current year tax or 100% of your prior year tax (110% if your AGI was over $150,000) through withholding or quarterly payments. 4. Keep in mind that if your annual income exceeds certain thresholds ($25,000 for single filers or $32,000 for joint filers), up to 85% of your Social Security benefits become taxable. Your approach sounds solid. Just make sure that $200/paycheck extra withholding will be sufficient based on your total income.

The SSA website SAYS you can have voluntary tax withholding on your SS benefits by submitting a W-4V form, but when I tried to do this last year they lost my paperwork TWICE!!! I ended up just increasing my work withholding like you did. The whole system is broken if you ask me. SSA blames IRS and IRS blames SSA while we just try to follow the rules and get nowhere.

I STRONGLY suggest you file Form 1040-ES for quarterly estimated taxes anyway, even with your increased withholding. You don't want to get caught with a penalty. The IRS doesn't care what SSA told you or that you tried to get answers. They will assess penalties regardless. Don't trust your employer withholding to be enough. The system is designed to get every penny from retirees who work.

I'm in almost the same boat (69, working full-time, taking SS since Jan 2025). My tax guy told me that the payroll withholding counts exactly the same as quarterly estimated payments. But he did say to check what my actual tax liability is likely to be. Don't forget that up to 85% of your SS benefits could be taxable depending on your total income. Make sure your extra $200/paycheck covers that. I'm having $275 extra taken out per paycheck just to be safe.

I went through this exact same situation last year when I turned 67 and started collecting SS while still working! The frustration with getting clear answers from both SSA and IRS is so real - I must have spent 6 hours on hold between the two agencies. What you're doing with the extra $200 withholding is perfect. I did something similar and had no issues at tax time. The key thing I learned is that as long as your total withholding (regular + extra) covers either 90% of this year's tax or 100% of last year's tax, you're golden. No penalties, no quarterly payment forms needed. One tip: keep good records of when you started the extra withholding and how much. It helped me when I filed my taxes to have everything documented. Also, don't let anyone scare you into thinking you need to do BOTH withholding AND quarterly payments - that's overkill and completely unnecessary. You're handling this the smart way. The extra withholding from your paycheck is actually better than quarterly payments because the IRS treats it as if you paid evenly throughout the year, even though you didn't start until August.