About 15 million Americans pay income taxes on their Social Security benefits — a surprise for many seniors who were planning on a source of tax-free income. Depending on your income, you could pay tax on up to 50% or up to 85% of your benefits.
As you prepare for retirement, it’s essential to determine if your benefits will be tax free or vulnerable to a tax hit. The first step is to compute your “provisional income,” which is basically your adjusted gross income (not counting any Social Security benefits) plus any tax-exempt interest and 50% of your benefits.
Read the complete article at Kiplinger
