Tax on Social Security Benefits

Client’s current tax position.

You do not give tax advice.

This calculator estimates how much of a client’s social security will be taxed and (with assumptions) how much the tax on social security will be.

As a rule of thumb, most affluent clients will have 85% of their social security taxed.

INVESTMENTS:

You must be registered with a broker/dealer to discuss investment concepts with a consumer.

TAXES:

This information is a general discussion of the relevant federal tax laws. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances.

LIFE INSURANCE:

Please remember the primary reason to purchase a life insurance policy is to protect one's beneficiaries through the death benefit.  However, permanent life insurance can also serve as an accumulation tool that has some very unique benefits. To qualify for life insurance, one must take a health examination to determine insurability.  Not everyone is insurable. Life insurance products contain fees, such as distribution fees and mortality and expense charges. The main way that a permanent life insurance policy is positioned to be tax advantaged is though policy loans.  Policy loans may reduce the cash value and death benefit of a policy, and if they are not repaid, a loan could cause a policy to lapse. If a policy is over funded and becomes a MEC contract, the contract's earnings will be taxed as ordinary income at withdrawal, and may be subject to a 10% penalty if withdrawn before age 59 1/2. All hypothetical presentations must be based off of policy illustrations, and the illustration must be presented to the client.

No script is provided for this calculator.

The math for this calculator follows the IRS instructions and worksheet for taxation of social security benefits.  This just involves basic addition and subtraction.

Taxation of Social Security is a complex subject.  This calculation is only an estimate.  If precise results are needed consult a qualified tax professional.