Taxing Social Security


          Can it be possible to pay Federal Income Tax on Social Security benefits? The short answer is: yes. There are situations where this can happen. Beyond this fact, there are a number of States that also might tax Social Security income. Here are a few points to keep in mind.

          States that do not have their own Income Tax will obviously not tax Social Security income. So if you live, or are planning to move to, a State like Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, or Wyoming, this will not be an issue. Other States give an exemption to Social Security income. This is true for States like Alabama, California, Delaware, Hawaii, Idaho, Maine, Massachusetts, Oklahoma, and Oregon. However, Minnesota, North Dakota, Vermont and West Virginia will apply Federal guidelines to Social Security income. States like Colorado, Connecticut, Kansas, North Dakota, and Utah can apply State Income Taxes to Social Security income.
          Even with what has been discussed above, there are ways to protect this income. There are many options no matter where you live and a qualified Tax Professional can guide you each step in the process.

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