Excited about retiring in the near future? As it gets closer you’re no doubt making sure and double checking that all the numbers are adding up and that’s a smart move. When you’re planning your retirement you have look at everything – such as all of your income streams during retirement and your living expenses you’ll be expecting.
Something that you also want to check are taxes you’d be expected to pay, specifically taxes on your Social Security income.
Will My Social Security Income Be Taxed?
Not everyone has to pay taxes on their Social Security benefits. To see if your Social Security will be taxed, you have to look at your *combined income and your marital status. According to IRS Publication 915 (Social Security and Equivalent Railroad Retirement Benefits), the income thresholds for Social Security are:
- If you’re single and your total combined income for the year is between $25,000 and $34,000, then up to 50% of your benefits can be taxed.
- If you’re single and your total combined income for the year is greater than $34,000, then up to 85% of your benefits can be taxed.
- If you’re married filing jointly and your total combined income for the year is between $32,000 and $44,000, then up to 50% of your benefits can be taxed.
- If you’re married filing jointly and your total combined income for the year is greater than $44,000, then up to 85% of your benefits can be taxed.
* Combined Income-Combined income when figuring tax on social security income is Adjusted Gross Income plus nontaxable interest plus 1/2 of social security benefits.
SSA-1099: You’ll Need It
If you’re already receiving Social Security benefits, you can use your SSA-1099 form (Social Security Benefit Statement) to determine how much of your benefits are taxable. You should receive it in January and should have the information required for the previous year.
When you file taxes, you’ll need this form, so please keep it in a safe place. Don’t worry about figuring how much of your social security income is taxable. TurboTax easily makes the behind the scenes calculations and figures out the accurate amount of social security income that is taxable based on your income entries.
Thoughts on Social Security Income
I’d love to hear your stories. Are you preparing to retire soon? Have you considered your Social Security income?