Best Ways to Avoid Social Security Taxes

social security

Best Ways to Avoid Social Security Taxes

For anyone getting closer to retirement the thought of collecting Social Security benefits has likely come to mind. You’ve worked a lifetime and now it’s time to kick off your shoes and reap the rewards of all that hard work. But did you know those benefits are not necessarily free? Some people do have to pay taxes on their Social Security benefits. However, if you plan and prepare properly then you can take steps to minimize the tax hit and keep your social security taxes as low as possible.

How Much Do You Have to Pay?

First off, your Social Security benefits might be tax-free. It will depend on your so-called provisional income. You can determine this number by taking your adjusted gross income(AGI), not including SS benefits. If your provisional income is less than $32,000 and you’re a joint filer, or $25,000 for a single-filer, you don’t have to pay any taxes on your SS benefits. If your provisional income is between $25-$34K or $32-44k, then you might pay taxes on as much as half of your SS benefits. If you make more than $34k or $44k, respectively, then as much as 85 percent of your SS benefits could be subject to taxes. You can determine your taxable SS benefits by clicking here.

Tips to Keep Your Social Security Taxes Down

So the best way to keep the taxable amount on your Social Security benefits as low as possible is by keeping your taxable income as low as possible. Here are some steps you can take to do that.

Live in a Tax-Friendly State – if you want to keep your taxable income lower, try moving to a more tax-friendly state. There are 13 states that currently tax Social Security benefits. If you move to one of the other 37 states you automatically save money.

Donate IRA Distribution to Charity – if you’re 70½ or older, you can donate as much as $100,000 each year tax-free to charity from your traditional IRA. These gifts can count as your required minimum distribution, but they do not count against your AGI.

Tax-Free Roth Withdraws – another source of income that does not count against your AGI are withdrawals from a Roth IRA. You can use the money from these withdrawals to help pay for living expenses, but they won’t count against your provisional income. It might also be a good idea to roll over your traditional IRA into a Roth IRA before you start receiving Social Security benefits.

Qualified Longevity Annuity Contract – a QLAC allows you to invest as much as $130,000 from your IRA into a special kind of deferred-income annuity. This money is not counted against you when you calculate your required minimum distribution. That helps lower your taxable income for the year.

Careful With Your Investment Income – keep a close eye on your investment income. If you earn a significant amount of capital gains, then your AGI could increase enough to put you in a higher bracket for Social Security taxes.


We hope you found this article about “Best Ways to Avoid Social Security Taxes” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at  Unfortunately, we no longer give advice to other tax professionals gratis.

To receive our free newsletter, contact us here.

Subscribe our YouTube Channel for more updates.

Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4 (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

Posted in

Preserving My Family’s Life’s Work & Legacy

Tom Chatham, Chairman of Chatham Created Gems & Diamonds, Inc., discusses preserving his family’s legacy and life’s work on Alan Olsen‘s American Dreams Show.   Transcript: Alan Olsen Welcome to America dreams. My guest today is Tom Chatham. Welcome to today’s show.   Tom Chatham Thank you glad to be here.   Alan Olsen So, Tom, we’ve had…

Mastering Business Growth with Howard Shore

Mastering Business Growth with Howard Shore

Howard Shore, Founder and CEO of Activate Group Inc. discusses managing, even mastering, business growth and the challenges growing quickly can present on Alan Olsen‘s American Dreams Show. Transcript: Alan Olsen Welcome to American Dreams. My guest today is Howard Shore. Howard, welcome to today’s show.   Howard Shore Alan, thank you for having me.   Alan…

Prosperity and Self-Reliance Zealot Steve Alder

Prosperity and Self-Reliance Zealot Steve Alder

From North America to Ghana, Africa, Steve Alder, President of Ensign Global College (, sits down to discuss how a professor helps to build global prosperity and self-reliance on Alan Olsen‘s American Dreams Show. Transcript: Alan Olsen Welcome to American Dreams I’m visiting here today with Steve Alder. Steve, welcome to today’s program.   Steve Alder Thank…

Steve Young on Building an Epic Family Legacy

Retired 49r Steve Young Discusses Building a Family Legacy at the Legacy Builders Event on May 15, 2024 As GROCO celebrates three decades of excellence in family office tax and advisory services, we have developed the Legacy Builders to stands as a testament to the firm’s enduring vision: to transform wealth into a powerful tool…