The reason retirees' liability to taxation keeps increasing is because the income thresholds associated with the taxation of benefits have never been adjusted for inflation. But based on a Social Security Administration study in 2015, it was estimated that as many as 56% of households would owe some level of tax on their Social Security payout in the coming years. When the taxation of benefits was introduced 40 years ago, approximately 1 in 10 households were expected to be subject to this tax. The Social Security Amendments of 1983 represent the last major bipartisan overhaul of the program in response to its shortcomings. In 1983, Social Security's asset reserves - i.e., the program's excess cash reserves built up since inception - were running on fumes.
To discover why Social Security benefits are taxable, we have to go back four decades.
For married couples filing jointly with $431,901 to $647,850 in taxable income, like the Bidens, a 35% marginal tax rate at the federal level awaits. The Bidens are paying a hefty tax bill on their Social Security benefits, tooīut here's something that might come as a bit of a surprise: The Bidens are being taxed quite extensively on their Social Security benefits.Īccording to line 6b of the Bidens federal tax return, $49,695 of their $58,465 collected was exposed to federal taxation in 2022. With the Bidens adjusted gross incomes regularly surpassing Social Security's earnings tax cap for decades, it's not in the least bit surprising that the two are netting such a robust payout. When the Social Security Administration calculates an individual's Social Security benefit at full retirement age, it takes that worker's 35 highest-earning, inflation-adjusted years into account. According to line 6a of the jointly filed Form 1040, Joe and Jill Biden collectively brought home $58,465 from Social Security in 2022. For the 2022 tax year, the Bidens generated $579,514 in total income, most of which derived from a traditional W2.īut because both parties have met the requisite lifetime work credits to receive a Social Security benefit, both received hefty checks from the program last year. I say "the Bidens," because Joe Biden files jointly with his wife, first lady Dr. On Tax Day, April 18, 2023, the White House made the Bidens federal tax return available. Given Biden's previous runs at the Democratic Party presidential nomination, his time as vice president, and now his position as president, the American public has 25 years' worth of Joe Biden tax returns they can comb through, if they so choose. Joe Biden is bringing home a hefty Social Security checkįor roughly 50 years, it's been somewhat of a tradition for presidential candidates and sitting presidents to make their federal tax returns public. Image source: Official White House Photo by Hannah Foslien.
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