Some people must pay taxes on part of their Social Security benefits. Others find that their benefits aren't taxable. If you get Social Security, we can help you determine if some - or all - of your benefits are taxable. Here are five tips about how Social Security affects your taxes:
1. If you receive these benefits in 2014, you should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount.
2. If Social Security was your only source of income in 2014, your benefits may not be taxable. You also may not need to file a federal income tax return next spring.
3. If you get income from other sources, then you may have to pay taxes on some of your benefits.
4. Your income and filing status affect whether you must pay taxes on your Social Security.
5. A quick way to find out if any of your benefits may be taxable is to add one-half of your Social Security benefits to all your other income, including any tax-exempt interest. Next, compare this total to the base amounts below. If your total is more than the base amount for your filing status, then some of your benefits may be taxable. The three base amounts are:
- $25,000 - for single, head of household, qualifying widow or widower with a dependent child or married individuals filing separately who did not live with their spouse at any time during the year
- $32,000 - for married couples filing jointly
- $0 - for married persons filing separately who lived together at any time during the year
Questions about income related to Social Security? Give us a call. We'll help you figure it out.