why pay taxes on social sercurity when you have already payed taxes on social sercurity on your pay check?

Answer 1

I've been a tax preparer 38 years. I couldn't believe that law was passed. We really did not receive a tax break when we paid into the system (like we would with a 401-k), yet social security, when we receive it, can be taxable. So, in essence, we are paying tax on money we have already paid tax on.

There was also a time when unemployment was not taxed. Sometimes I want to set down and write a book on the ever changing tax laws--the ones that effect the majority of the taxpaying citizens.

Here's the kicker. Did you know that most government employees do not pay into the social security system? Congress voted themselves one heck of a pension plan. If they had to live on the roughly $1,000 that the seniors and disabled had to live on, they would fix the Social Security system. Also, there is some talk in Congress of using social security $ to help illegal (yes--illegal) immigrants.

Where is our country going? You asked a very good question with no very good answer. Best to ask your Congressperson and expect no answer.

Answer 2

Fair is relative. You want to confiscate the earned wealth of the rich. This is an issue of freedom dude, not fairness. The rich already pay for most of what this country purchases. Without the golden goose laying all the eggs, you would all die. The lower tax receipts from the wealthy over the coming years (due to the huge losses recently), will place this country in a much more precarious financial position. The explosion in spending is coming at just the wrong time. The resulting inflation will damage this country for years to come. This is only the beginning and you better hope that the wealthy continue to carry the rest of Americans as they always have, especially in the recent past. Congress is Bernie Madoff and Social Security is the biggest Ponzi Scheme in the history of man. Amazing how no one will be going to jail for orchestrating this massive fraud.

Answer 3

You don't pay tax twice on your social security withholding. Your social security benefit is composed of three parts. First, your contributions paid through payroll withholding, second, your matching employer contributions and third interest earned on the government bonds that the first and second parts are invested in. (You didn't think that the money was just stuffed in a matress until you retired did you?) Over the course of a typical lifespan, the social security payout will be composed of 15% return of your taxes paid and 85% a combination of employer taxes and decades of interest earned. That 85% was not previously taxed and, if your non-social security earnings are high enough becomes subject to tax later.

Answer 4

There are special provisions when figuring taxable income for someone (or a married couple) on social security.

To determine whether any of your benefits are taxable, compare the base amount for your filing status with the total of one half of your social security payments plus all your income from other sources, including tax exempt interest.

Many people do not pay any tax on their social security payments. They may however be required to pay income tax if they have additional income from other sources like 401K payouts, retirement plans, investment income, or jobs they take after they have started drawing social security.

Answer 5

The taxes you paid for social security from your paycheck went to help fund social security. When you retire you are getting back the money that you put in. It used to be that social security was not taxable, but that rule got changed. Now, depending on other income, social security can be 0%, 50% or 85% taxable.

Answer 6

Because when Congress changed the laws some years back to try to shore up social security, that's what they decided and passed. Actually, you only paid taxes on half of the social security contribution, not on the half your emploiyer paid in. And yes, I realize that you can be charged tax on up to 85% of your benefits.

Is that necessarily logical? No. Is it the law? Yes.

Answer 7

pay taxes social sercurity payed taxes social sercurity pay check

Answer 8

Because as of now, those are the rules.

The law was passed in 1986 and expanded in 1992. Congress at the time and President Reagan were looking for some more revenue and this is where they went.

Unfortunately, due the current budget situation, it isn't going away any time soon.

Answer 9

You don't pay any more social security taxes if social security taxes have been deducted from your pay check.