Q: I'm 62 and now work part time. If I choose to receive partial Social Security benefits this year, will I have to pay Social Security tax on my wages if I'm taxed on the benefits? R.O., Cleveland, Ohio
A: Unfortunately, the rules for taxing wages and Social Security benefits are completely unrelated. You must pay Social Security tax on your wages regardless of whether you are eligible for Social Security benefits. And, if your "provisional income" exceeds a specified threshold, you'll be taxed on Social Security benefits even if you're still working. Currently, the tax on Social Security benefits kicks in if your provisional income exceeds an "adjusted base amount" of $32,000 for joint filers and $25,000 for single filers. Tip: You might be able to reduce or eliminate the tax on benefits by deferring investment income or reducing the tax-free income you receive.
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