Discussion:Will we see a change in taxing SS??
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Discussion Forum Index --> Tax Questions --> Will we see a change in taxing SS??
| 4 April 2007 | |
| I see so many clients hit with tax on their social security and from what I can recall the limits that SS becomes taxable have been that since the late 70's.
Just curious if anyone thinks there will ever be a change in this, seems to hit so many of my older clients very hard and those where one works and the other is on disability?? | |
| 4 April 2007 | |
| I hear you loud & clear on that one. I hate seeing this affect so many clients. I have never understood this reg. Hey let's penalize a senior citizen for continuing in the workforce AND helping us narrow the tax gap. Go figure. I have seen no indication that the limits will be increased. | |
| 5 April 2007 | |
| I just can not understand why some of your Senior organizations to not push this like AARP and such.
I just hate to see it for so many of my clients, IMHO it is one of the worst laws in the IRS codes. Looks to me like they would at least increase the limit at which SS is taxed since all other limits have increased over the years for inflation | |
Death&Taxes (talk|edits) said: | 5 April 2007 |
| AARP and company are more concerned with preventing the powers that be from gutting Social Security. Taxation came into the law with the 1981 Act which lowered the maximum tax rate on income to 50%. At that time 32K was well without of the reach for most retirees, so no one fought it. In that same act, Congress took away threshholds for paying tax on unemployment and they have never returned, no matter how good or bad the economy gets.
I would not hold my breath waiting for change. Look how long it took for Congress to modestly raise the exemption on the AMT, and they have the gall to called that a 'fix.' It's hard to remember but in 1981 there were no 401Ks, the first ones were just being approved, and pensions were corporate obligations. My father had a decent pension from Gulf Oil, some interest and SS for both he and mother but was nowhere near the 32K limit for taxation. | |
| 5 April 2007 | |
| Speaking of not increasing a limit, try this one on for size: I heard that the $25 limit for business gifts has been the same since the early 60's. Here you go client, enjoy this nose-bleed seat to the Braves game. I would have done you a little better, but I wouldn't get a write-off. | |
Death&Taxes (talk|edits) said: | 5 April 2007 |
| But they raised the limit for 'receipt-less' entertainment to $75. Actually this was IRS, not Congress, that did this, probably because they realized $25 of Entertainment was only $12.50.
I only wish we had Taxlamanac back in 1986-87 when 'simplification' came into law; most of the people posting here do not realize what a change that was. | |
| 5 April 2007 | |
| I think they should raise the cap to $200,000 for SS taxes and put a cap on the age instead :P | |
Bushmaster (talk|edits) said: | 5 April 2007 |
| What I can't figure out is why one gets taxed on 85% of SS when you couldn't deduct the 50% you paid to start with. I understand paying tax on the employer's portion, but not on your own portion. | |
| 6 April 2007 | |
| Bushmaster, I have always wondered that also. It seems like that came from Reganomics in 1986 from what I can recall
Pegoo I agree that the cap should be raised to at least 100K if not more, when this came about people did not retire on the amounts we see now and that is my biggest problem with this is that the limit on taxability has not been adjusted | |
