Social Security taxation with federal pension and 401k withdrawals - confused about $25,000 income threshold

The answer is more complicated than the brochure makes it seem. For Social Security taxation purposes: 1) Only 50% of your SS benefits count toward that threshold 2) Yes, both your FERS pension and 401k withdrawals count 100% as income The actual calculation for married filing jointly: Step 1: Take 50% of your SS benefits Step 2: Add ALL your other income (pension, 401k, interest, etc) Step 3: If that total exceeds $32,000 (not $25,000), then some of your SS is taxable For single filers, the threshold is $25,000. Based on what you've shared, your benefits will definitely be partially taxable.

My husband has similar situation with his pension and ss benefits. They WILL tax ur benifits!! They take like 85% of SS is taxable when u have that much other income. Sorry to be bearer of bad news but thats how the system works against us seniors 😠

I just went through this last year. The $25,000 threshold is for single filers and it's what they call your "combined income" - which is your adjusted gross income + nontaxable interest + half of your Social Security benefits. Since your FERS and 401k will push you way over this, you should definitely have taxes withheld from your SS payments. You can file Form W-4V to request withholding at 7%, 10%, 12%, or 22% of your monthly benefit.

Has anyone actually been able to get through to SSA to ask tax questions? I've been trying for 3 weeks to talk to someone about my similar situation and I keep getting disconnected or told the wait time is over 2 hours!

Ugh I've been dealing with this EXACT situation for 2 years now and it's SO FRUSTRATING!!! My husband has a state pension (not federal like yours) but same idea. We have to pay taxes on 85% of his social security even though we already paid TAXES on those contributions during his working years. It's DOUBLE TAXATION plain and simple!!!!!!!

To directly answer your questions: 1) Your SS benefits themselves are NOT counted in full toward the $25,000 threshold. Only 50% of them count in the provisional income calculation. 2) Yes, both the FERS pension and 401k withdrawals count 100% toward your income for this calculation. With your income levels, you'll likely have 85% of your SS benefits subject to taxation. I recommend having 10-15% withheld from your SS payments using Form W-4V. Also, since you have FERS, be aware of the potential impact of the Windfall Elimination Provision (WEP) if any of your federal service was not covered by Social Security.

my sister had a shock when she started collectin her SS with her teachers pension. she didnt withhold anything and had to pay a $4k tax bill last year!! dont make that same mistake

One thing no one mentioned - if you're close to Medicare age, this combined income calculation also affects your Medicare Part B and D premiums through IRMAA (Income-Related Monthly Adjustment Amount). If your income is high enough, you could pay significantly more for Medicare coverage.

For 2025, the IRMAA thresholds for Medicare Part B and D start at $103,000 for single filers. Based on your income estimates (SS + FERS + 401k), you'll be below that threshold so you should pay the standard premium. But it's good to be aware of this for future planning, especially if you decide to take larger 401k distributions later.