What do you mean my Social Security Benefits are Taxable?!?!

10 February 2012 / Uncategorized / Comments Off on What do you mean my Social Security Benefits are Taxable?!?!

Seven Tips to Help You Determine if Your Social Security Benefits are Taxable.

Many people may not realize the Social Security benefits they received in 2011 may be taxable.  All Social Security recipients should receive a Form SSA-1099 from the Social Security Administration which shows the total amount of their benefits. How much, if any, of your Social Security benefits are taxable depends on your total income and marital status. Generally, if Social Security benefits were your only income for 2011, your benefits are not taxable and you probably do not need to file a federal income tax return.

If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status.

To determine whether some of your benefits may be taxable, do the following quick two-step computation:

1) Add one-half of the total Social Security benefits you received to all your other income, including any tax-exempt interest and other exclusions from income.

2) Compare this total to the base amount for your filing status.  If the total is more than your base amount, some of your benefits will likely be taxable.

The 2011 base amounts are $32,000 for married couples filing jointly and $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouse at any time during the year.

The 2011 base amount is $0 for married persons filing separately who lived together during the year.

If you would like assistance with the taxable amount of your Social Security benefits, or any other issue, Widget is here to help you.  Please feel free to contact us!  We make taxes less taxing!