Social Security Benefits May Be Taxable
If you are collecting Social Security benefits during retirement or you receive survivor or disability benefits through Social Security, you could be liable for income taxes on a portion of those benefits, the Internal Revenue Service reports. Supplemental Security Income payments, however, are not taxable. Continue on to find out more.
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You could have to pay taxes on 50% of your Social Security benefits if the total income for an individual, including pensions, wages, dividends and capital gains plus Social Security benefits total between $25,000 and $34,000. For married couples filing jointly, if the total of all pensions, wages, dividends and capital gains plus half of each spouse’s Social Security equals between $32,000 and $44,000, they will have to pay taxes on 50% of their Social Security income.
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Married couples who file separately and also live apart follow the same guidelines as individual taxpayers. Those same guidelines for individuals also apply to anyone filing as head of household or as a qualifying widow or widower.
Individual taxpayers, married couples filing separately and living apart, heads of household and qualifying widows and widowers are taxed on 85% of their Social Security if their total income exceeds $34,000. Married couples filing jointly are taxed on 85% of their benefits if their income exceeds $44,000.
If you’re unsure about your taxable income based on your Social Security payments and other investments or income, it’s wise to consult with a tax preparer, tax accountant or IRS enrolled agent who can help advise you. Be sure your tax service of choice can help you e-file your taxes for ease, convenience and security.
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