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Aktuelle Version vom 24. Juli 2026, 03:15 Uhr
Despite the new tax rate reductions from the Jobs and Growth Tax Relief Reconciliation Act of 2003, the superior marginal tax bracket for many retirees can be a whopping 46.3%. Why? Because Social Security benefits are subject to income tax. Those affected are Social Security recipients who have the good fortune (misfortune?) to get subject to both the 25% income tax bracket and also the 85% inclusion rate for Social Security benefits.
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Defenders in the IRS position would say it returns to Section 61. The waitress provided a service for me, and I paid for this. Compensation for services is taxable. End of deal.
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