Social Security’s 2024 COLA, While Modest, Could Still Trigger Higher Taxes
A Difficult Policy Fix The Senior Citizens League advocates for adjusting these income thresholds to today’s dollars and continuing to do so annually — as is done for the rest of the tax code. As Johnson noted, the current thresholds for individuals mean that those with incomes between $25,000 and $34,000 may have to pay income tax on up to 50% of their benefits, while those earning above the $34,000 amount will see taxes assessed on 85% of benefits. According to Johnson, if the individual income thresholds were adjusted for inflation from 1984 to today’s dollars, then the individual filing status threshold of $25,000 would be about $75,000. The higher $34,000 threshold amount would be about $101,000. For couples, taxes kick in when income is between $32,000 and $44,000, at which level the couple may have to pay income tax on up to 50% of benefits. Above the $44,000 level, up to 85% of benefits may be taxable. If the joint filing status were adjusted for inflation from 1984 to today’s dollars, Johnson said, that $32,000 figure would be about $95,500, and the $44,000 threshold would be about $131,300. Obviously, changing the taxation of Social Security benefits is a complex task...
