IF you're planning to claim Social Security benefits in 2022, it's smart to begin thinking about taxes you may owe.
Taxes on retirement income like Social Security differ from taxes on income from a job.
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As a result, it may be beneficial to plan ahead and pay income taxes in installments throughout the year.
This can help you avoid owing more at the end of the year.
Below we explain what your options are when it comes to taxes on Social Security income.
Why could I owe more?
Those claiming Social Security for the first time likely filled out a W-4P form along with other retirement papers.
This results in taxes being held from your monthly Social Security payments.
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However, the withholding on this W-4P form was likely based on your last W-4 form from your previous employer.
As a result, you may not be taxed enough, which could result in owing more to the IRS.
What can I do throughout the year to avoid owing the IRS?
There are a few options available to avoid having to pay more, as reported by Fedweek.
First, you can ask for more money to be withheld from monthly payments.
This can be done by asking Social Security to do so when you first apply for benefits, according to the Social Security Administration.
If you're already receiving benefits and want to change your withholding, you may fill out a W-4V form from the IRS.
You could also make quarterly tax payments.
This requires you to send four estimated tax payments on April 15, June 15, September 15, and January 15.
It is up to you to set aside the money and send it in.
We explain changes coming to Social Security in 2022.
We also explain four Social Security changes that happen every year.
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December 09, 2021 at 11:44PM
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