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Follow these tips to not pay tax on social security benefits

Many Americans survive on social security so they have an income continuing into their retirement.

That money can be taxed both state and federally.

Taxes can significantly decrease a person’s SSI, resulting in them struggling even more to make ends meet.

By planning accordingly, you may be able to avoid your checks being taxed.

The state you live in matters, because not all states tax income.

There are thirteen states that do tax SSI:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

States may not have a state tax, but they could have a higher cost of living.

Another way to reduce the chances of federal taxes is to keep savings in a Roth IRA. This way the contributions aren’t tax deductible.

Withdrawals are free of taxes and penalties, but they must be taken after the age of 59.5 and after a five year holding period.

Exceptions to withdrawals are for buying a first time home, paying college expenses, or birth/adoption expenses.

Related: Congress is feeling the pressure to send $1,400 stimulus checks again, will you get one?

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