The amount each person in the United States receives each month in a Social Security check depends on several factors. During our time as a worker we can set this up so that we get the largest possible check from Social Security. This will require a good retirement plan and having a very clear goal during our working years.
However, there are factors that are out of our hands that can put our Social Security check money at risk. One of those factors is taxes, as we usually don’t take them into account when making a retirement plan. This can be a very common mistake but it is also a very serious one.
In addition to this we also have to keep in mind that we cannot escape taxes. Not paying the mandatory taxes on our Social Security check can mean a lot of problems down the road. So even though it may seem like they are taking a portion of our pensioner’s pension, we must pay it, no matter what the amount is. The important thing in these cases is to find out in which states we must pay state taxes.
In which states do we have to pay state taxes on the Social Security check?
We must be clear that even if we do not have to pay state taxes, federal taxes are always there. Therefore, we will always pay taxes if we reach the minimum income that requires us to pay taxes. There are some citizens who do not have to spend part of their Social Security check on taxes.
These are the states where it is mandatory to pay taxes on Social Security benefits:
- Colorado
- Connecticut
- Kansas
- Minnesota
- Missouri
- Montana
- Nebraska
- New Mexico
- Rhode Island
- Utah
If you live in one of these states, you will receive bad news, because now you know that you have to pay Social Security taxes. However, as we have already mentioned, in the rest of the states we must pay federal taxes. Therefore, we must always keep an eye on our taxes to avoid all kinds of financial problems.
Why are there more retirees paying payments this year?
As of 2023 the list of retirees paying Social Security taxes has increased. This has a logical explanation stemming from the COLA increase. As we have had a record increase in Social Security payments, this has affected taxes as well.
Retirement checks have gone up, but the minimum to pay federal taxes on retirement benefits has not gone up. Therefore, retirees who previously did not meet that minimum now do because of the 8.7% COLA increase earlier this year.
This may end up being paradoxical. And that is that it may be the case that a retiree gets a check increase and pays taxes that they did not pay before, so in the end they will have monthly either the same amount of money or a little less.
In the event that you have trouble understanding everything related to taxes, you have two possible options. On the one hand, you can contact a private advisor who can help you with your tax payments. On the other hand, you can talk to the IRS to rule out attorney problems.