Some Social Security recipients pay taxes on their benefits — but not all. Here's who will need to pay up for 2022.
, you'll need to monitor your income and make efforts to stay under the lowest thresholds listed above.
To start, you can be mindful of the types of retirement accounts you contribute to and take distributions from. Roth accounts, for example, are taxable upon funding — not withdrawal, so these can help reduce your taxable income come tax season. If you take required minimum distributions from your retirement accounts — which happens at age 72 in most cases — you can consider donating all or a portion of them to charity. This is called a"qualified charitable deduction," which allows you to exclude those distributions from your income.
Business owners can also be strategic about their purchasing and invoice patterns, particularly as they get closer to the end of the year."If you have a small, cash-basis business, you may reduce your income by increasing business expenses in December or delaying invoicing for work completed in December," says Marla Chambers, senior financial planner at Buckingham Advisors.
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