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I'm a friends a a subscribers sent me a link to the Motley Fool Social Security tax calculator I'll be interesting or good to look into as a matter of fact I haven't done it yet so I thought we'd go through together I haven't done anything with this weird how done anything was calculator at this point so let's uh okay there we go let's go ahead and run this so this is dated uh date behind my June 6 2016 pride mark Matthew Frankel TMF Matt guide math guy okay right are you retirement benefits taxable depending on your other income and tax filing status your Social Security benefits may be subject to income tax depending on your income up to 85% of your Social Security Bevis may be taxable there's a worksheet in the IRS pub that can help determine whether your Social Security is subject to tax or not however the easiest way to figure it out is with a Social Security tax calculator which can help you determine how much will be taxable at your marginal tax rate okay there you go all your Social Security benefits taxable if you didn't have significant income besides Social Security benefits the answer is typically no whether or not your benefits are taxable depends on your combined income as he's gonna combine actually Social Security Administration calls it combined income and Mathew here is doing the same thing it's actually probably the better terminology for it I call provisional income just because I've been using that as the dawn of mankind and I'll never not use it because it's ingrained in my head which is defining zero AGI plus your non tax on income and one half of your Social Security benefits and there's a formula AGI non-taxable interest plus a half your benefit for your benefits be taxable your combined income must be greater than 25 thousand if you're single or 32,000 for married filing jointly because only half of your Social Security income is considered in the formula and the highest possible benefit in 2016 is forty-four thousand a year Social Security income by itself isn't ever enough to make a single filer to have to pay tax on it when it comes to married couples with five monthly bonus bosses would need to be high earners for the combined social care benefit to exceed the threshold even then it's not we'll go to that in a nutshell if your social security benefit is taxable then it probably is because you have substantial other income it's also worth mentioning that if you're married and filing separately the income threshold is zero Wow I mean I do not know that if you're married filing separately you have no income threshold your benefits will be taxable interesting the calculation can be complicated not really once you do nothing you just got to do this I'm just telling you give yourself a couple of scenarios and just run the numbers it took me a while a couple days but once you do it you and you get his archit make sense I'm telling you it's okay to take time to figure this out somebody I was watching video it was a Devin I think it was he said if they don't know how to do the calculation on the social security they're not they don't have a good enough grass with Social Security I don't know if I agree with that I mean any time you're doing tax calculations it's okay to sit back and think about it and put it on a piece of paper and just kind of run it's almost like doing a when you're math class they say what's the a.m. equals mc-squared whatever you're like I don't know let me think about that a little bit some folks just need time to write it down step by step I know I do um I think it was definitely said I don't agree that I mean look I love Devin you ever one should subscribe his channel he's not gonna agree with everything I say and I'm not gonna agree that everything he says of course he should agree with everything I say all right all right sounds good app not notice I said up to fifty percent eighty percent five percent of your benefits attacks well it's not a simple of multiplication right to figure out how much all right with Todd now let's go to the tax calculator all right here we go so I want to mess with this we're gonna say we're married filing jointly cuz it'd be Charlotte me we're gonna say our marginal tax bracket almost a twelve percent I don't know why we'd put our marginal tax bracket there that's pretty cool it has a pop up for you right there for 2019 I mean that yeah I don't know why I put that in there yet cuz it says your federal tax on the income brackets but we don't know what that's gonna be it but okay we'll just go with it we're gonna say with no capital gains or no short-term no tax will interest no tax for interest no pension benefits we have taxable IRA distributions we're gonna say we have thirty five thousand oops $35,000 alright and that's it we have no wages no no no no no okay Social Security Bev has received we're gonna say we have thirty thousand dollars all right let me pause I'll get my calculator to see if I come up with what they come up with all right so hold on just a second be interesting all right so just in my little thing here I got thirty thousand Social Security thirty-five thousand of IRA distributions which gives us a provisional income or again a combined income of $50,000 because you take half of that Social Security benefit and add it to your other income which gives you $50,000 of your combined or AC I'm just gonna keep going back to provisional income because then I'm confused myself alright so we have fifty thousand dollars of provisional income we know the first thirty two thousand is not subject to taxation we know 44 minus thirty-two is twelve thousand and fifty percent of that is subject to taxation and then in this case we have what $6,000 is that as at 85% okay times 0.8 five percent which equals very would be just a second my friends fifty-one hundred all right so let me just show you one talk about the first thirty two thousand if you're married filing jointly none of its subject to taxation the next twelve thousand dollars which is 32 or forty-four thousand minus thirty-two is twelve thousand fifty percent of that is subject to taxation and then any amount above the 44 85 percent of that subject to taxation in this case because we have fifty thousand dollars of total provisional income we have six thousand dollars in that third Bend which is uh which is subject to taxation okay so we take the six thousand dollars plus the 50 100 and so our eleven thousand one hundred of our Social Security will be subject to taxation if that makes sense all right so eleven thousand one hundred plus the thirty five thousand dollars of I gave you new pen here a thirty-five thousand dollars of my ray income that we have which means our AGI will be forty six thousand one hundred alright forty six thousand one hundred our AGI now what we do is we take our standard deduction and with our standard deduction anymore if we're over we're gonna say it's 24,400 I think 24s things really good in there it's 400 because we're gonna say we're under 65 so we got forty six thousand one hundred minus twenty four thousand four hundred and I might be off a little bit on the standard deduction but I'm gonna have to go get a new pen here when we're done with this video so we got twenty-one thousand seven hundred dollars of taxable income 21700 because you got the eleven thousand one hundred of taxable Social Security Act with a thirty five thousand dollars of IRA income he gives me forty six thousand one hundred for AGI adjusted gross income would subtract out your standard deduction again I'm assuming is twenty four four I've taught me I don't remember but gives us a $21,700 taxable income all right so 21,700 will put us just above the twelve percent tax bracket so the first 20,000 or so will be subject to 10% tax agents that's two thousand taxation twenty one thousand one thousand seven hundred be subject to twelve percent and that will be one thousand seven hundred times point one two will be right at 204 so we'll have about 220 two hundred bucks of taxes all right so let's see what we got you ready that's what I'm saying about 2200 bucks let's see what these guys say all right hits the mids of working I know he had some at that time oh here we go I see right there we go justice yeah yeah bad lines to it they like it I like it so basically they're they're doing total social security benefit one half of Social Care Benefit AGI all right that's I don't like that but I get what they're saying okay so they're saying AG I okay I see what they're saying they're they're using AGI they're saying bases that's my IRA distribution or any other kind of income I see what they're saying that makes sense I like that actually that's pretty cool because their same calculate modified just goes okay so we know I see what they're doing they're calculate they're using all this different kind of income and put into into one thing called modified just gross income right here at $35,000 all right so we take 30,000 from so spirit 1/2 that $30,000 add to our other just gross income which gives us a combined income provisional income with $50,000 in the base mass 32,000 we have 18,000 plus 32,000 so the first 30 2018 thousand which is subject to some tax $12,000 is the second Bend point 50% that would be subject to tax and then the next amount I don't like the line of like it's confusing me for all that the six a thousand will be a third Bend point times 0.85 and we're gonna have taxable social security of eleven thousand one hundred just yeah just like we said we know okay well okay so baby okay got you can go through this on your own but Levin thousand one hundred just like I said so far as tax will of our social security eleven thousand one hundred taxable a percent of social security subject to taxation 37 percent estimated tax due 1332 and I had what 2,200 see but is that just tax to do on social security tax what portion of benefit okay now they're getting estimate taxes do a 1332 I don't get that are they saying because it's eleven thousand one hundred times 21 - yeah oh come on yeah they're saying this entire amount as tax at 12 percent it's not a tax at 12 percent easily so let's change this down we'll say this is a ten percent now we hit submit here just can't help ALAB why would they say I mean come on don't you know the marginal tax brackets now they're saying it's a one thousand one hundred because I was at 10 percent all right so they're just saying how much of your Social Security benefit be subject to taxation and then I've used margin I just like I don't get what they're doing here everything else makes sense except those last part it doesn't make sense to do that the reason being because Social Security your tax is thrown into the taxable have your Social Security is thrown into your taxable income which is added to what it's gonna be add to this $35,000 of other adjusted gross income that's how you do it I don't get why I mean here if we go back to if we go back the marginal tax rates hold on just a second right here so let's just do I mean we can do 22% but why would you that be come on the stupid it was gonna submit where is it okay where's the submit button here all right there okay so now I got a 22 now they're saying our taxes are 24 for 42 but we're not mark so rate the first amount of taxable income up to roughly $20,000 a tax of 10% and your taxable income is your taxable social security plus your other income after you tagged to take away your standard deduction I don't get why that's that hard and so the marginal rate is not you I mean just this goes into your marginal rate okay so the guy who sent me this email about the silliness of the Motley Fool tax calculator is spot-on this is completely and it's just not you can't use is unraidable it's wrong I don't know what to say so anyway I hope that helps this infantile it was good up until the last point and the guy who emailed me about it actually said it doesn't make sense to use this marginal rate whatever not even not we haven't figured out in the answer is also hope this helps is always like it like you see here subscribe and we'll see you next time thanks down