A new year means new changes are coming for many United States citizens who have Social Security and the COLA is one of those changes. The problem comes when sometimes retirees may be in for an unpleasant surprise regarding this annual increase.
While it is true that retirees get COLA increases with open arms each year, some may come to think that each increase can be a problem. This is because of taxes, something mandatory for all Americans to consider.
Making more money always means paying more taxes. This is true in most cases, but it is true that in the case of Social Security retirees this rule does not usually apply. The reason this happens is because of the usual income level of this group of Americans.
Still, any caution is an understatement, so it is advisable to check all the details before reaching a final conclusion. If we are cashing a Social Security check, we should watch out very carefully when the COLA takes effect.
AFTER THE 2024 COLA WILL SOCIAL SECURITY RETIREES PAY MORE TAXES?
Truth be told, the real answer to this question is entirely individual. That is, it is not possible to know exactly whether every single retiree will pay taxes unless each individual case is studied on a case-by-case basis.
However, one can speak generally about the situation and the truth is that the vast majority of retirees will not have to pay taxes after the 2024 COLA increase. The fact is that a beneficiary who only receives a Social Security check does not reach the minimum threshold for paying taxes.
Different is the situation in which that retiree has some other extra income. In that case, we must watch out. If we have some other income, we must watch out very carefully how much we earn, because then we would have to pay taxes.
In short, the COLA 2024 will not make us pay more taxes to most of us, especially if we only collect check from Social Security as a source of income. However, it is always best to contact a professional if you have any doubts.