Monthly United States Social Security checks are not tax-free. This may be shocking to many American citizens, but it is a reality. While it is true that on many occasions these taxes do not affect the money that comes into your pocket through your Social Security check at all, there are times when we have to pay more than we expected.
And that’s why a monthly organization that revolves around the amount of the check we collect is critical. Not having a plan to be able to pay all of our monthly bills is a huge mistake. And to this we must add that there are times when we have to pay taxes that we didn’t have in mind. These taxes can make the check for the month much smaller.
Despite this, there is still time to fix it. If we know what these taxes are and how they directly affect our cheque, we will have a huge advantage in our monthly financial planning. It is also important to remember that we are still in the Tax Season, so there is still time to send the Tax Return to the IRS.
Taxes that reduce your monthly pension check
These taxes could affect our monthly finances. The Social Security check may not be enough if we end up having to pay these taxes unexpectedly. We should keep this in mind whenever we collect the pension on the appropriate day of the month:
- State taxes. While it is true that most states do not tax Social Security checks, there are some that do. In all, 12 states levy these state taxes on benefits. The states are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and, finally, West Virginia. In any case, it should be remembered that they do not tax all pensioners. There are restrictions on income, age, and other situations.
- Federal taxes. This one are for all citizens, regardless of the state. However, not all Americans are obliged to pay federal taxes, as is the case with State ones. There are a number of conditions that make some citizens have to pay part of their check or not. For example, collecting a check as an individual is not the same as collecting it as a couple.
If we have doubts about the taxes that we must pay, we can always turn to a financial advisor. Although we must be careful not to give our personal information to a fraudster who wants to take advantage of our situation.