Social Security benefits are a crucial part of retirement income for millions of Americans, but many recipients are shocked to see deductions eating into their monthly checks. From healthcare costs to federal taxes, understanding what gets taken out can help you plan ahead and avoid surprises. Here are nine common deductions you should be aware of.
Medicare Premiums
Most people enrolled in Medicare Part B (which covers doctor visits and outpatient care) and Part D (prescription drugs) have their premiums automatically deducted from their Social Security payments. In 2025, the standard Part B premium is $170.10 per month, but if you earn more, you could be paying even higher premiums.
Yes, Social Security benefits can be taxed, depending on your income. If you have a combined income above $25,000 (for individuals) or $32,000 (for couples), a portion of your benefits may be subject to federal taxes. To avoid a big tax bill at the end of the year, you can request the SSA to withhold 7%, 10%, 12%, or even 22% of your monthly payments.
If you were overpaid by Social Security in the past, they’ll want their money back. The SSA will recover the excess by deducting a portion of your current checks until the debt is fully paid off. This can come as a surprise to those who didn’t realize they had been overpaid.
Retiring early? If you’re receiving Social Security benefits before reaching full retirement age and you’re still working, your benefits could be reduced if you earn too much. In 2025, the earnings limit is $21,240. For every $2 you earn over that limit, $1 is deducted from your Social Security benefits. Once you hit full retirement age, this deduction no longer applies.
State Taxes
While most states don’t tax Social Security benefits, 12 states do, including Colorado, Connecticut, and Kansas. Depending on where you live and your income level, you could see state taxes chipping away at your benefits.
Court-Ordered Garnishments
If you owe alimony, child support, or restitution due to a legal judgment, your Social Security benefits can be garnished to fulfill those obligations. Court-ordered garnishments can significantly reduce your monthly payments if you’re not prepared for them.Got unpaid federal debts like back taxes or student loans?
The government can take up to 15% of your monthly Social Security check to pay down these debts. This can be a major hit for retirees who depend on their full benefits.To prevent owing a large amount of money at tax time, you can voluntarily have taxes withheld from your Social Security benefits. It’s an option that helps many retirees manage their tax obligations more smoothly.
Payment to Appointed Representatives
If you hired someone to help you obtain Social Security benefits, their approved fees may be deducted directly from your benefits. This is common for those who used a legal representative to secure disability benefits.
What You Can Do to Protect Your Benefits
Staying informed about these potential deductions can help you plan and maximize your retirement income. Speak to a financial advisor if you’re unsure how these factors apply to your situation, and don’t forget to review your benefits statement regularly.
