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At what age is Social Security no longer taxable?

Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes. If receiving other income, you must compare your income to the IRS threshold to determine if your benefits are taxable.

investopedia.com - Are Social Security Benefits Taxable at Age 62? - Investopedia

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Taxation of Social Security

The earliest that you can begin collecting Social Security retirement benefits is at age 62, though many people wait until a later age in order to collect larger benefit amounts. However, age has nothing to do with whether those benefits are taxable by the Internal Revenue Service (IRS). Whether your benefits will be subject to federal taxation depends on the amount of any additional taxable income you may receive. Some states also assess taxes on Social Security benefits. Key Takeaways Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes. If receiving other income, you must compare your income to the IRS threshold to determine if your benefits are taxable.

Eleven states tax Social Security benefits in some manner, as of 2022.

How To Determine if Social Security Benefits Are Taxable

People whose only source of income is Social Security do not have to pay federal income taxes on their benefits. However, if they receive other sources of income, including tax-exempt interest income, they must add one-half of their annual Social Security benefits to their other income and then compare the result to a threshold set by the IRS. If the total is more than the IRS threshold, some of their Social Security benefits are taxable. For 2022 the threshold amount is $25,000 for singles and $32,000 for married couples filing jointly. Married couples who live together but file separately have a threshold of $0 and must pay taxes on Social Security benefits regardless of other income earned. The formula for calculating your combined income includes adding your adjusted gross income (AGI) plus nontaxable interest plus half of your Social Security benefits. Your other income, which is included in AGI, can come from a part-time job or withdrawals from a 401(k) plan or traditional individual retirement account (IRA).

More specifically, Social Security benefits are taxed as follows:

Up to 50% of Social Security benefits are taxed on income from $25,001 to $34,000 for individuals or $32,001 to $44,000 for married couples filing jointly. Up to 85% of benefits are taxable if the income level is more than $34,000 for individuals or $44,000 for couples.

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Do children inherit debt?

Do You Inherit Your Parents' Debt? If a parent dies, their debt doesn't necessarily transfer to their surviving spouse or children. The person's estate—the property they owned—is responsible for their remaining debt.

capitalone.com - Can You Inherit Debt From Your Parents? - Capital One

There are a few types of debt that you can inherit. Here are a few situations where you might be liable for debts your family member’s estate couldn’t pay for.

Home Equity Loans on Inherited Houses

Inheriting a family member’s home after they die can result in financial liabilities. If the decedent—the person who died—had a home equity loan or mortgage, the recipient could wind up with their debt.

Co-Signed and Joint Debt

Those who have joint accounts—like a joint credit card—can wind up with a co-holder’s debt if that person dies. Co-signers can also be responsible for a decedent’s debt. This doesn’t apply to authorized users, though.

Community Property State Debt

Community property states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin—might have different requirements for a spouse handling their deceased partner’s debts. The spouse may have to pay for some of their late spouse’s debts using community assets. States have different definitions of community property, but in general, the term refers to property acquired by the couple during their marriage. Consider checking your state’s laws to understand the terms.

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