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About to retire in ~8 months and live in California. I would like to know what taxes and deductions I should expect to see in my SS payment check; the SS office tells me I will receive ~2300, but how would I figure out how much will be the net amount?, for example -are there Medicare, FICA payments, etc? -And if I may slip another question: Are the monthly payments taxable? Thanks and best regards.

  • FICA is not withheld. Medicare premiums are deducted. – Joe Strazzere Apr 12 '17 at 11:02
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I'll answer your second question first:

Are the monthly [social security] payments taxable?

Sometimes. To figure it out, you need to calculate your combined income. The formula for combined income is:

Your adjusted gross income + non taxable interest + half of your social security benefits.

If you are married filing jointly, calculate the combined income using both you and your spouse's numbers combined.

After you've got that number:

  • If you are single or head of household,

    • if your combined income is $25k - $34k, 50% of your SS benefits might be taxable.
    • if your combined income is more than $34k, up to 85% of your benefits are taxable.
  • If you are married filing jointly,

    • if your combined income is $32k - $44k, 50% of your SS benefits might be taxable.
    • if your combined income is more than $44k, up to 85% of your benefits are taxable.
  • If you are married filing separately, up to 85% of your benefits are taxable.

In California, social security benefits are not taxed at the state level.

What is deducted from a social security payment?

Tax withholding from Social Security benefits is voluntary. By default, no taxes are withheld. But if you determine that you will have taxes due, you may want to request that they withhold some federal taxes from your checks. To do that, use IRS Form W-4V. On that form, you can request 7%, 10%, 15%, 25%, or no withholding. Fill out that form and submit it to the Social Security office to change your withholding.

Alternatively, if you determine that you will owe taxes, but you don't have enough withheld from other income sources, if you choose not to have taxes withheld from your Social Security benefits, you may need to make quarterly estimated tax payments.

State taxes are never withheld from Social Security checks.

FICA (Social Security and Medicare taxes) are not due from your Social Security benefits. Medicare Part B premiums, however, are deducted from your Social Security benefit payments.

Sources:

  • 1
    I believe Medicare premiums are also deducted from Social Security payments, right? – Joe Strazzere Apr 12 '17 at 11:00

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