You have worked hard your whole life and paid into social security. Now, you are receiving social security benefits. Are my social security benefits taxable? This is a common question clients may ask their tax attorney. The answer is, it depends. It depends upon other sources of income you may or may not have as well as your filing status. The article below has been drafted by a Denver tax attorney at The McGuire Law Firm to outline how and when social security benefits become taxable.
One you begin receiving social security benefits, you should receive Form SSA 1099, which is a statement showing the amount of benefits you have received. If your only source of income was your social security benefits, these benefits may not be taxable and you may not need to file a tax return, but you should still discuss the issue with your tax accountant or tax attorney. If you are working or have other sources of income, your social security benefits could become taxable. Your income and filing status will dictate whether or not your social security benefits are taxable. Outlined below are certain thresholds and situations where social security benefits may be taxable.
To determine if you social security is taxable, you can add one half of your social security benefits to all other income (including tax exempt interest) and compare to the figures below. If your figures is greater than the amounts below than some of your benefits may be taxable.
– $25,000: Single, head of household, qualifying widow, or married individuals who did not live with their spouse during the year.
– $32,000 if married filing joint.
– $0 for married individuals who file married filing separately and lived with their spouse at anytime during the year.
It is interesting that the figures for a single individual and married individual filing married filing joint are not proportionate. For other information regarding the taxation of your social security benefits, you can review Internal Revenue Service Publication 915. Many people think their social security is not taxable and are surprised when they file their first 1040 Individual Income Tax Return after receiving benefits. For individuals who plan to receive social security and have other sources of income it is important to plan for the taxation issues surrounding your benefits and the other sources of income you are receiving. A Denver tax attorney at The McGuire Law Firm can assist you with taxation matters and tax planning issues regarding receipt of your benefits, retirement assets and other sources of income.
Schedule a free consultation with a tax attorney in Denver or Golden by contacting The McGuire Law Firm. Law offices in Denver and Golden!