No. The earnings limit ($16,920 in 2017 for beneficiaries who are age 62 through full retirement age) applies only to the income of the person who is collecting a monthly Social Security benefit check. It is that person’s income that determines whether benefits are reduced. One dollar in benefits is withheld for every $2 in earnings above the earnings limit amount.
Where a working spouse’s income will have an effect, however, is in the taxation of Social Security benefits if …
When you pay for benefits such as health insurance with pre-tax (also called before-tax) dollars, the deductions are taken off your gross income before income taxes are paid. Taxes are then calculated on the reduced salary amount. Having pre-tax dollar deductions results in less income tax paid than would otherwise be the case.
Examples of items that can be paid with pre-tax dollars include medical and dental insurance and employee parking fees. By way of contrast, after-tax dollar deductions are …
FICA is an acronym for “Federal Insurance Contributions Act.” FICA tax is the money that is taken out of workers’ paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits. It is a mandatory payroll deduction. Two separate taxes are added together and treated as one amount that is referred to as “payroll taxes” or FICA. These two taxes, individually, pay for both Social Security retirement benefits and Medicare health insurance.
FICA tax deductions also provide …
The goal for taxpayers is to pay no more than the least possible tax owed. Avoiding taxes through legal tax strategies is not to be confused with illegal tax evasion. Legally avoiding taxes means using effective financial record-keeping, decision making, and planning strategies to reduce your total income tax. One example of good tax management is adjusting the amount of federal income tax withheld from your paycheck. If you receive a big income tax refund (over $500) each year, you …
