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Reader's Mail: Tax On Social Security Benefits An important and grossly unfair tax has been overlooked in the rush for tax cuts. Retirees now in their sixties and seventies were strongly advised to prepare for retirement by putting savings into an IRA account. They (retirees) knew that income tax would have to be paid upon withdrawal. However, tax on Social Security benefits varies with adjusted gross income and was increased in 1993. When retirees take money out of IRAs, they not only pay full tax on that money, they also must pay a corresponding increase in tax on their Social Security benefits because of increased adjusted gross income. This is double taxation of those that can afford it least. The tax on Social Security should be cut or eliminated. -R.A., Viera, FL This article first appeared in Volume 5, Issue 4 of "The Social Security and Medicare Advisor" newsletter (March/2000). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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