9 Commonly Believed Myths about Social Security

5) Social Security benefits are fully taxed

Tax is confusing in almost every aspect. I hope you weren’t thinking Social Security would be any different.

Like all taxes, your social security is based on your income. At a high-level look, your benefits may be partially-taxable up to 85%. Or, and hopefully this is the case for you, your benefits may not be taxed at all. The less money you make in social security benefits, the higher the likelihood is that you won’t have to pay taxes on those benefits. To see where you fit in, or estimate your benefit payout, the social security administration website provides information on their benefits planner page.

There are other variables on how your social security benefits are taxed, the most common is probably whether you are working while collecting social security, or if you have fully retired.