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<< If I understand it right the IRS "handy-dandy" worksheet looks like if your AGI goes more than 25,000 (for a single) or 32,000 (for married) you begin to lose your social security benefit to taxes at an alarming rate. >>

I don't think you're reading the worksheet correctly. Remember that the bottom line of the worksheet is not tax, it's the amount of SS benefits you include in your income.

Let's say you were in the top tax bracket, 39.6%. (This applies on a joint return only for TAXABLE income above $271,050 for 1999.) You would pay tax on 85% of your Social Security benefits. Thus, at a maximum, 33.6% (39.6% of 85%) of your Social Security benefits would go back to the Federal government in the form of income tax on them. Hardly alarming for a household with almost $300,000 income.

Of course, most SS recipients who take a part-time job would end up paying far less a percentage of their benefit in income tax.

Phil Marti
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