A dollar earned . . .
Social Security checks are a welcome income for many retirees, but benefits are often taxed if a person has substantial additional income such as wages, dividends or interest.
No one pays federal income tax on more than 85% of benefits, but the combined-income threshold (for benefits and other income, like wages) is low for when the tax kicks in: $44,000 for couples and as little as $25,000 for some individuals. That means retirees ought to think about pushing back any extra income.
"Seniors should postpone taking discretionary income, like capital gains, to early January of a following year instead of December, if they can," says Larry Karmel, a partner at the tax specialty firm Metis Group.
"With the income threshold at 85%, delaying the income for a time makes the benefit dollar worth more than a dollar of other income," Karmel says.
For married couples, itemized deductions can help offset potential taxes on benefits, says Bulankov.
"Filing jointly may enable couples to deduct all or part of the long-term-care insurance premiums they pay for themselves if they meet certain IRS criteria, and help minimize benefit taxation," Bulankov explains.
Looking ahead
If retirees find the tax burden heavy now, it could get heavier with tax reform. Some proposals include flat taxes, with the elimination of taxation on dividends and interest. But that could mean higher rates on wages.
Expiration of the Bush tax cuts, set for the end of 2012, could raise rates on dividends from 15% to 39.6%, hitting regular income that many seniors depend on.
Meanwhile, taxes are going up in 2013. The health care bill passed in 2010 adds a 3.8% tax on investment income, including interest, dividends, capital gains and other unearned income, for individuals with modified adjusted gross incomes above $200,000 ($250,000 for married couples). And there will be a 0.9% increase in Medicare payroll taxes for the same income levels.
With all this in mind, some tax analysts worry that retirees aren't prepared for their senior years.
"The cost of retirement has grown, and many people have not saved enough," says Lee Isaacson, a CPA with the accounting firm Reznick Group. "They need to budget their costs and understand that taxes are now part of their responsibility, and start making estimated payments where, as an employee, they didn't have to."
In the end, experts say, cutting down a tax bill takes work.
"Plan ahead for taxes as much as planning for a vacation," says Scholz. "A little tax planning now can produce enough tax savings to actually pay for a trip."
More from CNBC.com:
Taxing me on a Tax that I paid into.
It make me want to Cry
It just Breaks my 
I can't even go and have a cold
without getting taxed. The 
has taken over our Great Country
