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|Subject: Re: social security||Date: 7/11/2001 5:17 PM|
|Author: zzyp||Number: 7100 of 19643|
Your accountant exagerates when he says "most, if not all" in my opinion. If "most" means over 50%, I have heard that it is possible, but have not been able to generate a figure as high as 50%.
First, obtain an estimate from SS admin. on your SS benefits at age 62. You should have been already notified of this by SS administration if you are within a year of that age.
If you, or your accountant, used a computer program for your taxes, I believe the easiest way to get an exact estimate of the impact is to take last year's data, then insert the estimate of SS benefits as if that amount was received on form SSA-1099, then put down 50% of that figure as tax withheld. Have your tax program recalculate your taxes, and then see if the total is higher or lower than before.
If these numbers lowered your taxes, then the incremental rate in your case is less than 50%.
Or, you can NOT put in the ficticous tax withheld with the projected SS. Then take the increased taxes and divide by the estimated SS benefits to check on the rate. With a $500K interest income, and $20K SS, my Year 2K program gave a rate of 32.7%, well below "most, if not all," but enough to hurt, even if it is below the incremental rate of other income.
The calculations are possible without a computer program of course, but are not easy.
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