What are chances that as Trump favors SS will not be taxed? Currently up to 85 percent of this "government benefit" is taxed up to 37 percent. I think that chances are slim.

I can't see a reason that SS should not be taxed, but 401k distributions should be.

taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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username checks out

taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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You say SS "contributions" have been taxed, but the tax is the "contribution" itself. View the SS "contribution" as just a compulsory tax-free contribution just like a 401k is a voluntary tax-free contribution, and why should 401k be taxed but not SS?

strbrst777 said:

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What are chances that as Trump favors SS will not be taxed? Currently up to 85 percent of this "government benefit" is taxed up to 37 percent. I think that chances are slim.

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The SS Fund is underfunded and getting worse. I believe that I read somewhere that the Fed Govt is already contributing +$100B every year to make sure that everyone that is collecting SS is getting their full promised check. This situation will get worse every year.

What has crossed my mind is that if Trump could get taxes eliminated on SS Benefits while lowering payments by the same amount as the taxes that are being immediately collected. That would probably reduce or eliminate the Feds from putting money in and then taking it back a couple of weeks later in taxes. Recipients would end up getting the same amount to spend each month.

Thoughts ? ? ?

Three types of retirement account taxing situations.

Traditional IRA or 401(k) accounts. Contributions are tax deferred until distributed.

ROTH IRA or 401(k) accounts. Contributions are included in taxable income, distributions are tax free

SS accounts. "Contributions" are taxed, as are a portion of distributions.

A major difference is that you own your IRA/401(k) accounts, and can fi b do their values at any time. You do not own your SS account, and have no way to determine it's actual value. You get what the gov't decides to pay you.

waitwhat? said:

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taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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You say SS "contributions" have been taxed, but the tax is the "contribution" itself. View the SS "contribution" as just a compulsory tax-free contribution just like a 401k is a voluntary tax-free contribution, and why should 401k be taxed but not SS?

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Yes I misspoke, and repeated the mistake in my follow up post. The contribution is the tax. I agree it should be treated the same as a 401(k).

PCC_80 said:

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strbrst777 said:

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What are chances that as Trump favors SS will not be taxed? Currently up to 85 percent of this "government benefit" is taxed up to 37 percent. I think that chances are slim.

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The SS Fund is underfunded and getting worse. I believe that I read somewhere that the Fed Govt is already contributing +$100B every year to make sure that everyone that is collecting SS is getting their full promised check. This situation will get worse every year.

What has crossed my mind is that if Trump could get taxes eliminated on SS Benefits while lowering payments by the same amount as the taxes that are being immediately collected. That would probably reduce or eliminate the Feds from putting money in and then taking it back a couple of weeks later in taxes. Recipients would end up getting the same amount to spend each month.

Thoughts ? ? ?

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My thoughts: there is no SS fund, there never was a fund. Just like there is no defense fund and no welfare fund. The government promised its citizens an annuity in return for 12% of their income and told them that in exchange they would have economic security….and put security in the name of the transaction. Either give them back their money back or print money to fulfill their agreement. Either option the whole of society bears the burden of the government's largesse and not just the elderly.

waitwhat? said:

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taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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You say SS "contributions" have been taxed, but the tax is the "contribution" itself. View the SS "contribution" as just a compulsory tax-free contribution just like a 401k is a voluntary tax-free contribution, and why should 401k be taxed but not SS?

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You have already paid income tax on your social security contributions. Go look at your 1040…..it starts with your gross earnings and there is no deduction for your personal SS contribution. There is a deduction for the employers half for the employer and a deduction for the "employers piece" for self employed folks….but the first 6% is fully taxed if you are part of the 50% of Americans that pay income tax.

I'm OP. Back to my question. What are the chances that SS will not be taxed?

waitwhat? said:

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taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

---

You say SS "contributions" have been taxed, but the tax is the "contribution" itself. View the SS "contribution" as just a compulsory tax-free contribution just like a 401k is a voluntary tax-free contribution, and why should 401k be taxed but not SS?

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No...

I'm quite sure I can't exempt the amount I paid into FICA from my AGI for income tax purposes.

So, I pay the FICA and then I pay taxes on the amount of income I pay to FICA.

"Contributions" to Social Security are not deposits into a pension fund held under a worker's name and thus do not constitute an asset that belongs to the worker (e.g. a 401K).

It is a mandatory government insurance program and works in a technical sense like any insurance, except its "premiums" are a mandatory tax and its claim benefits are based primarily on age or disability rather than direct loss.

Wage earners do not pay a "double tax" under the Federal Insurance Contributions Act anymore than they pay a "double tax" on their car insurance premiums, which are paid from taxed income. Almost every other comment on Social Security on this thread is also wrong or misleading.

The Social Security Administration has a wealth of material on line that explains the laws, programs and procedures involved in its operations, if anyone is interested in knowing rather than just spouting

Aren't "contributions" to SS taxed? Thought I paid taxes on my income and I don't remember getting a deduction for SS contributions. Businesses do.

For the third time: What are the chances that SS will not be taxed? See first post.

PCC_80 said:

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strbrst777 said:

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What are chances that as Trump favors SS will not be taxed? Currently up to 85 percent of this "government benefit" is taxed up to 37 percent. I think that chances are slim.

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The SS Fund is underfunded and getting worse. I believe that I read somewhere that the Fed Govt is already contributing +$100B every year to make sure that everyone that is collecting SS is getting their full promised check. This situation will get worse every year.

What has crossed my mind is that if Trump could get taxes eliminated on SS Benefits while lowering payments by the same amount as the taxes that are being immediately collected. That would probably reduce or eliminate the Feds from putting money in and then taking it back a couple of weeks later in taxes. Recipients would end up getting the same amount to spend each month.

Thoughts ? ? ?

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It's not underfunded. It's over distributed. To people who do not deserve it and/or who have never contributed to it.

As a Gen Xer I'm opposed. I mean my entire life every governmental policy has basically been designed to help other generations and to have my generation foot the bill for their benefits and now that I can actually see SS on the horizon I don't want to screw that up.

I think Trump will be successful in eliminating SS payments from taxation. Republicans will bring it to the floor and few politicians will want to vote to tax old Baby Boomers who vote in large numbers.

Taxes on SS and inheritance are terrible IMO. Paying into SS is not an option and your relatives paid taxes while accumulating any inheritance, it's basically double taxed.

Maybe if we had a DOGE we wouldn't need these ridiculous taxes.

pfo said:

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I think Trump will be successful in eliminating SS payments from taxation. Republicans will bring it to the floor and few politicians will want to vote to tax old Baby Boomers who vote in large numbers.

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Which will put the lie to the notion that anyone in DC, regardless of party, gives a sh/t about the deficit or the debt.

taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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Correct. 401k is taxed either going in or coming out.

Taxing SS is just taxing you on another tax.

If anything, 401K should be free in and out since you actually took care of your self.

taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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The amount the employee "contributed" has been taxed, the amount that the employer matched has not, nor has any amount received over and above the employee "contribution" been taxed. If self-employed, then the 12.4% has been taxed.

Depending on when you start taking benefits, as an employee, you recover what you paid into the system in four or five years. Anything above that should be taxed.

taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

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Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

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Somewhere, you just know that a Democratic politician in Maryland, New England, Minnesota, Illinois, California and/or Colorado is probably thinking how unfair it is that SS is only taxed once. Or that Roth IRA owners are getting off without paying their "fair share".

PCC_80 said:

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strbrst777 said:

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What are chances that as Trump favors SS will not be taxed? Currently up to 85 percent of this "government benefit" is taxed up to 37 percent. I think that chances are slim.

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The SS Fund is underfunded and getting worse. I believe that I read somewhere that the Fed Govt is already contributing +$100B every year to make sure that everyone that is collecting SS is getting their full promised check. This situation will get worse every year.

What has crossed my mind is that if Trump could get taxes eliminated on SS Benefits while lowering payments by the same amount as the taxes that are being immediately collected. That would probably reduce or eliminate the Feds from putting money in and then taking it back a couple of weeks later in taxes. Recipients would end up getting the same amount to spend each month.

Thoughts ? ? ?

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We could stop sending gajillions to other countries.

taxpreparer said:

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waitwhat? said:

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I can't see a reason that SS should not be taxed, but 401k distributions should be.

---

Two reasons:

1. 401(k) contributions have are not taxed until distribution.

2. SS "contributions" have been taxed; currently at a minimum of 12.4%.

---

This is the big difference. SS is taxed twice. If we slash enough government with Doge, then maybe this can happen.

The bigger question is when will Congress and the White House decide to do something to keep SS funded at a rate to not cut benefits once the program becomes insolvent and only relies on incoming taxes? They've been kicking the can down the road for decades.

Social Security benefits were not taxed until 1984, when 50% of benefits were made subject to taxation, then raised again in 1994 to 85% (keep in mind, for retirees who completely or highly depend on SS for their income, they still pay little to nothing in taxes). These taxes go directly back to the SS program. While cutting these taxes are great for those who are having to write a check to Uncle Sam, its negative is pulling forward the insolvency date when all benefits will get a forecast 21 to 25% reduction...currently predicted for 2033/2034. Which means Congress needs to come up with more tax revenue in addition to what is already needed (raising eligibility ages and reducing benefits are the other options).

The longer Washington waits to address the issue, the more difficult the solution will be if we want to keep benefits at the same level. Will we see the Trump administration take any leadership role? .

They won't. SS is the golden cow. It's never going to be touched. It's what's going to kill us. The Dems only solution is to get rid of the cap which is an incredibly stupid idea.

We have to cut death benefits and also raise the age. Neither will happen so we are sunk.

How about instead of cherry picking, we just pick a percentage and implement a flat tax?

"SS is the golden cow. It's never going to be touched."

Give it 10-15 years. A lot of us boomers will be gone along with the huge payouts.

strbrst777 said:

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For the third time: What are the chances that SS will not be taxed? See first post.

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In the next 2 years...slim to none. If Trump makes actual deep cuts in the first 2 years then maybe there's say a 20% chance they pick this up as a boost to get voters in 2028.

Only the absolute rich should pay tax on SS.

I mean, if you make more than $30,000, you can afford it. Right?

RICH SHOULD PAY THEIR FAIR SHARE!!!

Again, there is no fund of money for SS in any way different than a fund for defense or welfare that are going to "run out " on any such and such date. It's just rhetoric to raise taxes or shirk social contracts while we bleed deficits on all manner of benefits thru "the social security program" to folks not previously eligible. George W did the most damage. As soon as you "make socially security secure/funded"…they will create a new benefit under the program for folks not paying into the system and "bankrupt" it again.

Us olds were around in 80's when they "made it secure" by raising rates, extending the retirement age and taxing SS benefits only to watch multiple presidents go in and raid the new fund once it was secure.