How does Social Security Work?

Just about all of us pay Social Security Tax through payroll deductions or Self-Employment Tax, and millions receive Social Security Retirement benefits. But few have a true understanding of how the taxes are collected, and how the benefits are calculated.
This video explains how Social Security is funded, how retirement benefits are calculated, and what can affect those benefits
CORRECTION: At 5:32 "Marvin's" Retirement benefit at age 62 should be $2,189.
To learn more about Self-Employment Tax, click here: • What is Self-Employmen...
How Social Security is taxed is explained in this video: • Why is my Social Secur...
Additional Information and Resources:
Social Security Administration: www.ssa.gov
Additional details about the information presented in this video, plus much more, can be found here.
Investopedia: "How Is Social Security Tax Calculated?" www.investoped...
The Wikipedia article on "Social Security (United States)" en.wikipedia.o...) contains extensive information about all aspects of the Social Security System, including the history of the system, how taxes are collected and benefits calculated, all benefits provided, and potential solvency of the system, backed up by dozens of sources.
Image and footage credits:
The Rail Geek
Storyblocks.com
Wikimedia Commons
The image of "Marvin" was generated by thispersondoesnotexist.com (stability.ai) and any resemblance between these images and any person, living or dead, is coincidental and not intentional.
NO OTHER ARTIFICIAL INTELLIGENCE WAS USED TO WRITE, EDIT, ANIMATE, VOICE, OR EDIT THIS VIDEO
Intro Music: "Bluesy Vibes" - Doug Maxwell - TH-cam Creator Music
Outro Music: "Modern Attempt" - Track Tribe under license from TH-cam Creator Music
DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or financial advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or financial professional.

[@TheTaxGeek]

CORRECTION: At 5:32 "Marvin's" Retirement Benefit at age 62 should be $2,189.

[@miguelcubero3440]

In your professional experience with individuals that have receive a form 1099-SSA, are they well informed about the taxable consequences of the benefits? If not than who should be better at informing them, the SSA or tax prefessionals generally? Awesome video as usual!

[@TheTaxGeek]

No, the vast majority of taxpayers have no idea why and how their Social Security benefits are taxed. In fact, a lot of Tax Professionals don't know a sufficient amount about it to properly explain it to their clients. It's really not the job of the SSA to explain this; only note that some benefits may be subject to taxation. It's actually up to the IRS and Tax Professionals to provide this education, BUT, because the computation is complex and involved, such education is hard to do.

[@KC-vw6wz]

In your example Marvin collects ss benefit at 62, he should receive $2,189.

[@TheTaxGeek]

Thanks for pointing it out. It will be noted in the description and a pinned comment.

[@ashmeenwomack2538]

Hi The Tax Geek, love your videos. What resources/websites do you recommend for staying abreast on the latest and most accurate tax information? Thanks!

[@TheTaxGeek]

Just about every topic I cover lists resources and information in the description. Most of my information comes directly from the IRS, but I do back it up from outside sources, mainly investopedia.com and nerdwallet.com. Both sites are regularly updated with language that's simpler to follow than the IRS. You'll often see headlines in the mainstream media, but these stories often lack context and don't give the entire story. Major tax preparation sites such as hrblock.com and turbotax.com also provide useful and up-to-date information. Just remember that all commercial websites are trying to sell you something, which is why I double check with the IRS. Thanks for watching!

[@miguelcubero3440]

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