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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76241  
Subject: Re: Social Security, income, and taxes Date: 7/9/1998 7:57 AM
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Greetings, Cheryl, and welcome.

<<My understanding of the Social Security rules are that once you retire and start to recieve Social Security, there is a limit on how much money you can make before they start taking it away from you (or taxing the dickens out of it, which amounts to the same thing).

Do they treat investment income the same as if the SS recipient has income from work? How about dividend income? IRA distributions? Capital gains?

I've always been curious about this. Are there any websites I should look at? I paged back a ways through the Taxes folder, but didn't see anything relevant.>>

Yes, there are earnings limitations on work between the ages of 62 and 70 that if exceeded will result in a forfeiture of the Social Security you receive. There are also overall income limits that may result in the taxation of SS. Others have given you some data on that, but you may want to go to http://www.ssa.gov where you can get a more complete explanation.

Dividends, capital gains, interest, IRA distributions, pensions and the like have no impact on the earnings limits that result in SS forfeiture. You lose part of your SS only if work (i.e., a job) causes you to exceed those limits. However, these same items are counted as part of your income in determining whether or not your SS payments will be subject to tax because that taxation is based on your Adjusted Gross Income.

Regards…..Pixy




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