Phoenix Taxes | Social Security
So you’ve finally reached that golden age of retirement and you’ve started to receive your social security benefits. Did you know you may have to pay federal income tax on part of those benefits? Here are some tips to help you figure out if your benefits are taxable and to what extent.
Form SSA-1099 – If you received social security benefits in a given tax year, you should receive a Form SSA-1099 in the mail by the end of January. This form details how much social security benefits you received, any federal withholding you had taken out as well as any Medicare premiums deducted from your social security benefits.
Only Social Security – If social security was your only source of income, your social security benefits probably won’t be taxable and you probably don’t even need to file. However, if you have any other income, you may have to pay taxes on some of your benefits.
Interactive Tax Assistant – The IRS has a unique tool to see if any of your benefits are taxable. Visit the interactive tax assistant to find out more information.
Tax Formula – Here is a quick way to estimate if you must pay income tax on your social security benefits: add one half of your social security benefits to all of your other income (including tax exempt interest). Then compare the total amount to the base amount for your filing status. If your total income is more than the base amount, then your social security benefits might be taxable.
Base Amounts – The 3 base amounts are as follows
- Single, head of household, qualifying widow or widower with a dependent child and married filing separately and lived apart from your spouse – $25,000
- Married filing jointly – $32,000
- Married filing separately and lived with your spouse at any time during the year – $0
If you have any questions do not hesitate to contact us at Dusseau & Makris, PC, your Phoenix CPA firm.