![\"sherlock-holmes-147255_960_720-pixabay-publicdomain\"](\"http:\/\/www.torrid-tech.com\/community\/wp-content\/uploads\/2016\/04\/sherlock-holmes-147255_960_720-pixabay-publicdomain.png\")
<\/a><\/p>\nDo you have a bit of Sherlock Holmes in you? Can you crack this case?\u00a0<\/strong><\/p>\n The taxation of Social Security is a bit of a complicated topic, but the basics are that the IRS has a specific worksheet that you can fill out to figure out the “tax” you will owe on your Social Security.\u00a0 Part of your Social Security is tax free, but then it can jump up to 50% or 85% taxable depending on other income and various factors.<\/p>\n If you want to learn how to calculate it, then consider getting the “Social Security Taxation Kit” that we offer which explains it all through video and worksheets.<\/p>\n Meanwhile, I wanted to share a SPECIFIC case study that an advisor sent in that shows an interesting “visual” anomaly in the RetirementView program.\u00a0 NOTE: this not a the real file but a copy and all identifying information has been removed.<\/p>\n So let’s dig in<\/em>… first look at the main Retirement Income Graph below.\u00a0 The advisor sent this file in asking “Why does the Social Security jump up by over $4,000 for 2 years and then drop back down? ”\u00a0 You can see where we point out this anomaly in the following graphic:<\/p>\n To search for clues about this, I flipped to the Spreadsheet to examine the numbers.\u00a0 If you scroll to the right you will eventually get to the royal blue Social Security columns.\u00a0 Indeed, we see that there are 2 years where the taxation drops from 85% to 0%.\u00a0 This causes the amount of income from Social Security to INCREASE.\u00a0 Notice that’s counterintuitive to think about… taxation DROPS but income INCREASES.\u00a0 I guess that’s why everyone would like lower taxes (except maybe our government).<\/p>\n Here is a graphic showing the spreadsheet columns that are relevant.\u00a0 Now this is an internal copy where we have columns for every one of the Social Security taxation lines on the IRS worksheet so we can validate our calculations.<\/p>\n<\/a>If you are an advanced RetirementView user, think to yourself “Why would this happen?”<\/p>\n