Taxable Social Security Benefits Some taxpayers have to pay federal income taxes on their Social Security benefits. This usually happens only if they have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to Social Security benefits To determine the amount of Social Security or Railroad Retirement benefits that may be taxable, taxpayers must compare the base amount with the total of: 1) One-half of the benefits received, plus 2) All other income, including tax-exempt interest. Other income is not reduced by any exclusions for: • Interest from qualified U.S. Savings Bonds, • Employer-provided adoption benefits, • Foreign earned income or foreign housing, or • Income earned by bona fide residents of American Samoa or Puerto Rico. Taxable Social Security Base Amounts Filing Status Base Amount Single, HOH, or QW.................................................... $ 25,000 MFS and lived apart from spouse all year................. $ 25,000 MFJ............................................................................ $ 32,000 MFS.................................................................................... $ 0 Generally, up to 50% of benefits will be taxable. However, up to 85% of benefits can be taxable if either of the following situations applies. • The total of one-half of the benefits and all other income is more than $34,000 ($44,000 for Married Filing Jointly). • The taxpayer is Married Filing Separately and lived with his or her spouse at any time during the year. Who is taxed. Benefits are included in the taxable income (if taxable) for the person who has the legal right to receive the benefits.
Posted on: Tue, 13 Jan 2015 15:26:36 +0000
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