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years old. Whatever benefits the former spouse receives has no bear- ing on the amount of benefits the working person will receive.

Taxation of Benefits Approximately 20 percent of people claiming social security bene- fits must pay taxes on what they receive. Benefit taxation only affects those people with substantial income in addition to their ben- efits. To help determine if your benefits would be taxable, the social security Administration sends out a benefit statement to every social security recipient. This mailing shows the amount of benefits you have received. Then, when you are (or your CPA) is preparing your taxes, you will be able to determine if you will need to pay taxes on your benefits.

If you find that you will, in fact, have to pay taxes on your bene- fits, you may realize that you will also have to pay taxes on you ben- efits in years to come. You can either have taxes taken out of your monthly checks, or you can opt to pay quarterly estimates. Generally, it’s easier to have a set percentage taken out of your benefit checks.


Part of the social security system is a government-sponsored health care program called Medicare. Medicare provides a valuable service for senior citizens, and others who qualify, who may not otherwise be able to afford the health care they need. Medicare, though, should not be confused with Medicaid. Most people believe that these programs are the same thing, but they’re not. Medicare is a federally sponsored and funded program, whereas Medicaid is a state-sponsored pro- gram. Medicaid is more of a welfare health care system, designed to help those with low income and little to no resources.

Medicare can be a very complex subject, but it’s vital that you understand its benefits and drawbacks because by the time you will be eligible for coverage, you may find that paying the normal premi- ums for other, private health insurance is difficult. Or you may not even be insurable anymore under private health plans. With Americans living longer than they ever have, we’ve seen an increase in the type and frequency of health care needed. Medicare helps provide seniors

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