Consider state taxes, too

The state you live in has a lot to say about this, too, as most states won’t tax Social Security income. Even so, 13 states still tax Social Security income, oftentimes with a couple of exceptions for low-income retirees, as data from information services company Wolters Kluwer showed.

The states that usually tax Social Security income are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, and New Mexico, but also North Dakota, Rhode Island, Utah, Vermont, and West Virginia.

Set up your Social Security tax withholding

Those who owe a lot of money on their Social Security payments have two options: to make quarterly estimated tax payments to the IRS or have their federal taxes taken from monthly payments.

You could have 7%, 10%, 12%, or even 22% of your entire monthly benefit taken for taxes, but you can’t select a completely different percentage or a flat dollar amount. Setting up tax withholding is usually way more convenient than having to pay a tax bill every quarter.