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<< I was considering taking an early ss pay out, but I never considered the tax consequences. If someone could explain, please do >>

Anywhere from none to 85% of your Social Security benefit is included in your income for income tax purposes. There is a worksheet on page 15 of the 1040 instructions that you can use to test different scenarios.

The worksheet is really easier than a verbal explanation, but here's a shot at the basic rule. If one-half of your Social Security beneifts plus all your other income is more than $25,000 for a single person or $32,000 for a joint return, some of your Social Security benefits will be subject to income tax.

Phil Marti
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