https://www.fool.com/taxes/2020/01/23/does-social-security-income-go-on-my-2019-tax-retu.aspxDoes Social Security Income Go on My 2019 Tax Return?
/The rules for taxing benefits are increasingly harsh.
Dan Caplinger
Jan 23, 2020
Tax season is right around the corner, and some taxpayers are already working hard in anticipation of getting their refund from the IRS as soon as possible. Getting money back can be especially important for retirees, particularly those who largely rely on the fixed income that Social Security benefits provide/
Think uncle Sam gives 100 dollars but uncle IRS may take back up to 40 dollars
Cant reallt keep free money given by govt I guess
Comments
"Up to" 85% of SS may be taxed as ordinary income. Ordinary income tax rates top out at 37% for tax year 2019.
85% x 37% = 31.45% (or less), nominal.
Even considering the 3.8% net investment income tax (NIIT), that's directly applicable only to investment income. It can, however, lead to an indirect tax on ordinary income. Still, at worst only 85% of SS could be indirectly subject to that surtax. See question 4 in the IRS NIIT Q&A.
https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax
85% x (37% + 3.8%) = 34.68% (or less), actual.