Here is a general response about the taxability of Social Security, as this is a difficult issue to answer without knowing more about your circumstances.
Getting your personal finances in order during tax season can feel like a Herculean task, especially if you are unfamiliar with the applicable requirements.
Is Social Security taxable?
For example, if you get Social Security benefits from the government, that money is subject to taxation. The amount you must pay varies depending on your income and filing status (joint or individual).
To lead you through the process, here’s a guide to the method used by the IRS to figure out just how much you’ll owe on your benefits. Many individuals who receive Social Security benefits are required by Internal Revenue Service regulations to pay income tax on that money.
The amount you owe is determined by a formula involving what the IRS refers to as combined income. Your adjusted gross income is your total income. If any of the following apply, up to 85 percent of your Social Security income are taxable:
- You file a federal individual tax return, and your combined income exceeds $34,000.
- You and your spouse file a joint tax return and have a combined income of more than $44,000.
If any of the following apply, up to fifty percent of your Social Security income is taxable:
- You file an individual federal tax return, and your combined income is between $25,000 and $34,000
- You and your spouse file a joint tax return and have a combined income between $32,000 and $44,000.
In January, the Social Security Administration should give you a form to assist you in determining how much you received in benefits throughout the course of the year. This is your Social Security Benefit Statement or SSA-1099, and you can use it to calculate your tax liability when completing your federal tax return.
For all benefit recipients, the SSA-1099 form should be mailed automatically. If you do not receive it, you should be able to access a printable version online after creating a Social Security account.
Read more: Child Tax Credit 2023: Changes that could affect your family tax returns
Should I Still File A Tax Return?
The primary motive to file a tax return while not being required to do so is to collect a tax refund.
If you had federal income tax withheld or made anticipated tax payments in 2022, you might need to file a tax return this year. You could obtain a tax refund of any surplus withholding.
If you qualify for tax credits that give refunds, such as the earned income tax credit, the child tax credit, or the child and dependent care tax credit, you are also encouraged to file.
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