I was wondering why the amount of social Security thats taxable changes. For example: the amount has been seen to move from 85% - 50% back to 85%. Why?
- Branon Frederick
Greenwood Village, Colorado
Hi,
The RSP implements the social security taxation algorithm... based on a formula from IRS soc sec is 0, 50 or 85% taxable... look at spreadsheet and scroll all the way to right to royal blue social security columns... you will see our estimate of the percent taxable...
As the calculation crosses the thresholds you will see non-linear drops as more taxes are taken out... or if they end up running out of investments and an income shortfall occurs... most likely their taxation will decrease as they did not have as much income that year.
- Support