Three Income Sources You May Be Shocked to Discover Could Be Taxable
Most people are well aware that their wages are taxed. But there are some other income sources you may be much more surprised to find Uncle Sam taking a cut of. Here are three of them.
Social Security benefits aren't taxed for every retiree, but around 50% of seniors pay federal income tax on them. And more will in the future since the income threshold at which benefits become taxable isn't indexed to inflation.
Retirees could owe federal tax on up to 50% of benefits once their countable income hits $25,000 as a single filer or $32,000 as a married joint filer. Once countable income reaches $34,000 for single filers or $44,000 for married joint filers, up to 85% of benefits will become subject to federal tax. Countable income is defined to include half of all Social Security income along with all other taxable income and some nontaxable income.
Source Fool.com