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Social Security Taxation


Social Security is an element of financial planning that our clients are usually curious about. What will my benefits be? Will it provide what I need throughout retirement? Will Social Security be a viable option when I retire? It’s a hot topic.

Now that it’s tax time, the taxation of Social Security benefits comes into play. Here are three terms the IRS suggests to know about the taxation of your benefits.

1. Form SSA-1099: If you received benefits this year, you should get a Form SSA-1099 showing your total amount given in 2014.

2. Taxation Base Amounts: These amounts will dictate if your benefits are taxable or not.

$25,000: If you are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from your spouse for all of 2014

$32,000: Married filing jointly

3. Taxation Breakdown: To know if your benefits are taxable, add one-half of your Social Security benefits to all of your other income, including tax-exempt interest. If your total is more than the base amount listed above, a portion of your benefits may be taxable.

Do these tips help navigate your Social Security taxation issues? Which tip did you find most helpful?

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Comment   |  3 years, 7 months ago from Denver, CO