Surprise Tax Bills for Social Security Recipients Hit 66 Million Americans
Due to recent changes, some 66 million Social Security users will pay more to the IRS this tax season. The Cost of Living Adjustment raised Social Security payouts by 8.7% last year. While this may sound like wonderful news, retirees must pay the IRS a percentage of that amount.
Retirees and Remote Workers Brace for Surprising Increases
Retirees whose adjusted gross income, including 85% of Social Security payouts, exceeds $25,000 for single filers or $32,000 for married couples must pay taxes on their benefits. Although Social Security payouts rise practically every year, the $25,000 tax threshold has not changed since 1984. Annually, the IRS debt has increased. Retirees will pay the highest tax boost since 1981 due to the 2023 COLA.
Senior Citizens League executive director Shannon Benton expects a large rise in Social Security taxpayers this year. Retirees and remote workers face higher taxes due to probable multiple state income taxes. Despite working remotely, five states, including New York, tax employees depending on their employer’s location.
Social Security Recipients and Remote Workers Face Higher Taxes in 2024
The IRS begins processing 2024 tax returns on January 29 and closes on April 15. IRS Free File is open to help people file their taxes. After receiving returns, the agency processes most refunds within 21 days.
With millions of Americans facing higher taxes this tax season, Social Security recipients and remote workers are unpleasantly surprised. Pensioners and remote workers confront financial issues due to maintained tax thresholds and rising Social Security payments, which have increased taxes owed.
Individuals are encouraged to use IRS Free File to navigate tax season and file on time despite these hurdles. Many will closely monitor tax season and seek strategies to offset the financial effect of unanticipated tax changes.