Tax Eliminated on Social Security Benefits - Mouse Print Says NO!

One thing about tips today, they are recorded on credit card transactions as we move to a cashless society. There is a clear paper trail of how much an employee received when they cash out for the day so I think more are reported today than in the past when cash was more heavily used. One other common thing today is tip sharing (which hate BTW) amongst all employees. This creates a paper trail as well. Not saying that people don' fail to report them, but I don't think it is as easy as it was at one time

It is funny how we tax work. Think about it, I have to pay the government to work, just seems counterintuitive.
 
Try to guess what the record is for time drawing a Federal pension? Pop did some research and it is over 100 years. Any time you make a rule the cockroaches will figure a way around said rule. My wife, who is state retired employee has a hard time understanding the difference between her pension which disappears when she passes, and my CD's which go to the heirs when I pass. unless I outlive every one of them.
We paid off everything as quickly as possible. Double, triple, quadruple payments. A $56k mortgage at 10.5% was paid off in 2.5 years. Paid on time the total would have been $180,000.
Our Federal tax liability was under 7% last year and we made almost $100K. No house or car payments for over 30 years now. We only borrow money to make significant increases in our net worth. Now past 7 figures. Credit Union is renting our money and it is insured.
 
Onomea said:
I think it unlikely that most tipped workers were paying taxes on tips anyway due to low annual income for service workers and the reliance on self reporting of tipped income.
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Many food service establishments take 15% from the server’s total orders so self reporting isn’t necessary. If “you” can prove you didn't make 15% that day, then there was an adjustment made in your favor.
 
If you qualify for the $6k deduction and you are in the 22% tax bracket, you will realize $1,320 in tax savings. Multiply by two if married and spouse is age 65 or older.
 
I'm 73 yo and am pleased that this tax provision for the so called "no tax" on SS benefits passed and will help so many retired folks. The feds should have never taxed SS benefits. But, as always in these cases of tax reduction changes, they benefit some and the rest of us in higher tax brackets can forget any benefit to begin with! I worked my behind off, had a great income, saved and invested wisely and am blessed to be living comfortably. However, I will continue to be taxed on my SS benefits since I am in a much higher bracket and will continue to pay beaucoup taxes every year...as always. :ROFLMAO:
 
The temporary addition to the standard deduction will make exactly zero difference to our (my wife and I) income taxes.

At least the top bracket ($626k up) was reduced permanently to 37%. They were looking at losing a critical 2.6% - most certainly could not afford it. 🤑
 
Forefinger said:
... as always in these cases of tax reduction changes, they benefit some and the rest of us in higher tax brackets can forget any benefit to begin with.... :ROFLMAO:
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I was making a similar complaint some years ago to a friend. He said to me, somewhat wistfully, "Nice complaint to have..."

True enough. :)
 
I will tip maybe $10 with my plastic payment but slide the waiter/waitress maybe $20-30 in cash, depending on where we go to eat, etc. A regular plain old family restaurant he/she will get maybe $40-50 total, but there’s a minimal amount recorded on paper just to keep a little honest.
We’ll find out what the heck is going on in the Spring.
 
It won't help low income seniors that much. They already don't pay taxes on Social Security. It's most valuable to those that are under the cap, but make enough to get their Social Security counted as income. It also helps people who haven't filed for their Social Security yet so it's a bit strange to tie it to SS.
 
collector14 said:
If you qualify for the $6k deduction and you are in the 22% tax bracket, you will realize $1,320 in tax savings. Multiply by two if married and spouse is age 65 or older.
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Looking at the cost of a running a home, car costs, and food in this city, a single person must be living on somebody's couch if they aren't in the 22% tax bracket.
 
Jon651 said:
The increased deduction on Social Security benefits is not "No tax on Social Security"; the deduction is reduced as your income climbs (which also includes non-Social Security sources of income) and sunsets after 3 years.

The "No Tax On Tips" applies to the first $25k of salary earned from tips. It also sunsets after 3 years.

The "No Tax On Overtime" applies to the first $12,500 of overtime pay. This too sunsets in 3 years.

There was no reason to sunset ANY of these provisions - if the country doesn't need the tax income for the next 3 years then we don't need it ever. As a retired professional firefighter who worked a 56-hour work week, the tax code was already skewed against us. We only collected overtime past 53 hours per week so perhaps I'm a little biased. Even though I'm well past my working years on shift, for my brothers and sisters still on the job I would have liked to see that overtime tax benefit be a bit more robust - and a bit more permanent.
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It's just smoke and mirrors so they can have a good sound bite for re-election campaign. Why are we giving random groups of wage earners these arbitrary exemptions for a few years? Just lower the tax % for everyone in the tax bracket. But a .2% drop in rates doesn't sound as good.
 
Jon651 said:
The increased deduction on Social Security benefits is not "No tax on Social Security"; the deduction is reduced as your income climbs (which also includes non-Social Security sources of income) and sunsets after 3 years.

The "No Tax On Tips" applies to the first $25k of salary earned from tips. It also sunsets after 3 years.

The "No Tax On Overtime" applies to the first $12,500 of overtime pay. This too sunsets in 3 years.

There was no reason to sunset ANY of these provisions - if the country doesn't need the tax income for the next 3 years then we don't need it ever. As a retired professional firefighter who worked a 56-hour work week, the tax code was already skewed against us. We only collected overtime past 53 hours per week so perhaps I'm a little biased. Even though I'm well past my working years on shift, for my brothers and sisters still on the job I would have liked to see that overtime tax benefit be a bit more robust - and a bit more permanent.
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That's good info.. Thank you.

God bless you for being a first responder!! :)
 
As dockmurgw pointed out, it's not only the new $6,000 deduction, it's the renewal/making permanent of the previous additional deductions and bracket adjustments. Something a lot of people fail to notice/mention. When adding them all up, will be paying very minimal tax (if any) on my ss next year.

Seems pretty good deal to me, given the rule decisions they operated under. Course i am in the tax bracket the $6000 deduction was designed to help. The previous 2017 adjustments got me an extra $2000 refund.
 
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zeke said:
As dockmurgw pointed out, it's not only the new $6,000 deduction, it's the renewal/making permanent of the previous additional deductions and bracket adjustments. Something a lot of people fail to notice/mention. When adding them all up, will be paying very minimal tax (if any) on my ss next year.

Seems pretty good deal to me, given the rule decisions they operated under. Course i am in the tax bracket the $6000 deduction was designed to help. The previous 207 adjustments got me an extra $2000 refund.
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Yes, and that is the most important part of what just passed. Compared to the 2017 Tax Cuts & Jobs Act being made permanent, what's being discussed now in this thread is background noise. If that act was allowed to sunset, the result would have been devastating. I remember how that act affected me, and the thought of it sunsetting gave me heartburn.
 
The Devil is in the details!
I pay a higher rate on my Socialized Insecurity than any other income.
Like twice as much.
So I’m won’t take a Victory Lap until next year’s tax filing.
 
Forefinger said:
I'm 73 yo and am pleased that this tax provision for the so called "no tax" on SS benefits passed and will help so many retired folks. The feds should have never taxed SS benefits. But, as always in these cases of tax reduction changes, they benefit some and the rest of us in higher tax brackets can forget any benefit to begin with! I worked my behind off, had a great income, saved and invested wisely and am blessed to be living comfortably. However, I will continue to be taxed on my SS benefits since I am in a much higher bracket and will continue to pay beaucoup taxes every year...as always. :ROFLMAO:
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My Dad always said to me: “Don’t worry if you’re paying taxes-It means you’re making money.”
 
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