For single tax-filers, a provisional income of $25,000 to $34,000 could result in having up to 50% of benefits taxed. Meanwhile, a provisional income above $34,000 could mean having up to 85% of benefits taxed.

For married seniors filing joint taxes, a provisional income of $32,000 to $44,000 could result in taxes on up to 50% of benefits. And a provisional income above $44,000 could mean taxes on up to 85% of benefits.

Clearly, these thresholds aren’t very high. And the reason is that they were established decades ago. The provisional income limits calling for taxes on up to 50% of benefits were put into place in 1983, while the limits for taxing up to 85% of benefits were implemented in 1993.

But inflation has risen a lot since then, as have wages. And so to subject seniors to these dated thresholds does them a huge disservice.

2. The way COLAs are calculated

Social Security benefits are eligible for an annual cost-of-living adjustment, or COLA, the purpose of which is to enable seniors to maintain their buying power as living costs rise. COLAs are based on third quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When the CPI-W shows little to no change, COLAs follow suit. It’s only when the CPI-W shows large upticks in inflation that benefits get a nice boost from one year to the next.



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