Social Security tax withholding percentage to avoid year-end tax bill - new retiree question

The standard options for SS withholding are 7%, 10%, 12%, or 22% of your monthly payment. Most middle-income retirees find 10-12% works well, but it really depends on your total household income and tax bracket. Since you have pension plus your work income, you might want to go with 12% to be safe. You can always adjust it later by submitting a new W-4V form to SSA.

we didnt withhold anything the first year and got HAMMERED with taxes!! almost $4000 we hadnt planned for. now we do 15% withholding and usually get a small refund. better safe than sorry!!!

I'm a retired accountant, and I always recommend that my clients do a rough tax projection when they first start receiving Social Security. Add up all your expected income sources for the year (your job, pensions, her SS, any investments), subtract your standard deduction, then calculate your approximate tax bracket. That will tell you the appropriate withholding percentage. Remember that with your combined income, up to 85% of her Social Security benefits might be taxable depending on your total AGI.

You should know that the SSA withholding system is extremely annoying!!! I've had them somehow lose my withholding request TWICE in the past 3 years. Make sure you keep a copy of whatever form you submit and check your benefit statements to confirm the withholding actually starts. And don't assume it will continue automatically year after year.

have you tried calling the ss office to ask them? good luck getting thru lol

One other important thing to consider: If this is your wife's first year receiving benefits, remember that she's only getting benefits for part of the tax year. When calculating the right withholding percentage, you should account for this partial year of benefits when projecting your tax situation. Next year, when she receives benefits for all 12 months, you might need to adjust the withholding percentage accordingly.

My husband and I just have 15% taken out and we sleep better at night. We're in a similar situation - I have a pension and he works part time. We used to do 10% but still owed a bit at tax time.

dont forget some states tax SS too!! we moved from nebraska to arizona partly because AZ doesnt tax our social security!

After getting burned by underwithholding our first year on Social Security, our tax preparer gave us some great advice. She said to look at last year's total tax bill, subtract any withholding from other sources like pensions, and then have enough withheld from Social Security to cover the rest. Has worked perfectly for us the last three years.

I REALLY wish the SSA would update their systems to allow us to change withholding percentages online instead of having to mail in paper forms every time. It's ridiculous that in 2025 we're still dealing with such outdated processes for something as simple as tax withholding. My Medicare withholding I can adjust online, but not SS??