Turning 70 is a landmark, but not as far as the Social Security Administration is concerned. Whether you're working and paying Social Security tax on your earnings, drawing Social Security benefits, or both, turning 70 won't, in itself, affect the taxes you pay.
TL;DR (Too Long; Didn't Read)
Turning 70 alone does not change the Social Security tax due on your wages since your filing status and income determine that. If your only income comes from your Social Security benefits, you likely don't have to pay taxes on that money.
Income Tax on Social Security After Age 70
Under the Federal Insurance Contributions Act, your employer takes Social Security taxes out of your paycheck. If you're self-employed, you pay self-employment tax instead, adding it to your income tax payments. The Social Security Administration says as long as you're earning an income, you keep paying the tax. Neither your age nor receiving retirement benefits changes that. It's possible that continuing to earn money in retirement will increase your benefits.
If your only income is Social Security benefits, you probably don't have to pay income tax on them. The Social Security Administration says that about one-third of recipients do pay tax on their benefits, because they have other taxable income. By itself, having other income doesn't make your benefits taxable. Above a certain income level, however, taxes on benefits kick in. Turning 70 doesn't change the level – only your income and filing status do that.
When Social Security Benefits Are Taxable
Your benefits become taxable, at any age, when your combined income reaches the federal limit. Combined income is your adjusted gross income, plus half your Social Security benefits, plus any tax-exempt interest you receive. You can wait to pay your taxes at tax time, or you can complete a Form W-4V (sometimes erroneously called a Form WV4) to have your taxes taken directly from the benefits before they're paid to you, just like a paycheck.
Taxable parts of lump-sum benefit payments received in a year are payable in that year, even if the payment includes earlier year benefits. Lump-sum payments are reported on either Form SSA-1099 or RRB-1099. These forms also show the years for which the payment was made. If you receive a lump-sum payment including benefits for any years before 1983, it is shown in box 3 of these forms. either Form SSA-1099 or Form RRB-1099. Payments for years prior to 1984 are not taxable. Note: This does not involve lump-sum Social Security death benefits, which are not taxable.
While you can usually use the current tax year's income for figuring out taxable parts of all benefits received that year, you can also figure out the taxable aspect of prior year lump-sum payments separately by using that year's income information. If this method lowers your taxable benefits, you may use it instead of the current tax year method.
2018 Taxable Social Security Limits
You can calculate the exact amount of taxable benefits using Worksheet 1 in IRS Publication 915. You can also use the online taxes on Social Security benefits calculator on the IRS website. On your Form 1040, you report your total benefits and the amount that's actually taxable. Usually only 50 percent of your benefits are taxable, but for some taxpayers it's 85 percent. Regardless of age, you add the taxable benefits to your other income and apply the same tax rate. There's no special rate for your Social Security checks.
For almost all taxpayers, benefits become taxable when combined income reaches $25,000. For couples filing a joint return, the cut-off is $32,000. The other exception is couples filing separate returns who lived together part of the year: Their Social Security benefits are always taxable.
- Purestock/Purestock/Getty Images