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Revision as of 01:33, 18 August 2026

Despite the new tax rate reductions of the Jobs and Growth Tax Relief Reconciliation Act of 2003, the superior marginal tax bracket for many retirees is often a whopping 46.3%. Why? Because Social Security benefits are subject to income financial. Those affected are Social Security recipients who have enough good fortune (misfortune?) pertaining to being subject to both the 25% taxes bracket as well as the 85% inclusion rate for Social Security benefits.

If you claim 5 personal exemptions, your taxable income is reduced another $15 thousand to $23,500. Your income tax bill is destined to be approximately three thousand dollars.

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