By Tirupati Gumpula
Social Security is one of the important programs for Americans' Social safety.
Even though it doesn't cover a person's retirement expenses it does help you to build something in your golden years.
Even though the money is coming from the government, it is still taxed.
However, a new bill in the proposal may change this completely.
According to the current law, there are taxes on your Social Security payments. To see, if you need to pay for that, you need to see your combined income first.
Combined Income = Annual gross income + Non taxable interest+ 1/2 of Social Security payment
If your combined income is greater than $25,000 and you are a single filer, you need to pay some taxes on your Social Security payment.
For couples, this limit is $32,000. The exact amount you owe in Social Security taxes will vary from person to person's total income.
Apart from this, some states also collect taxes on Social Security payments. Please check with your state for more information.
Now we will look into the Taxes on Social Security according to the new bill.
A new proposal for the bill currently circulating in Capital Hill, if approves, then the federal government doesn't impose taxes on Social Security.
Rep. Angie Craig has prosed the bill and named it the You Earned It, You Keep It Act.
He said Social Security is a promise to the Americans that "the dignity of a secure retirement will be within their reach"
According to the proposed bill now raise the limit for payroll taxes from $147,000 to $250,000
As of now, it may not do any benefit. If it passes, there you will see the actual benefit of not paying the taxes on Social Security.