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Are Social Security Benefits Taxable?

TaxBizPro, LLC Posted on: February 17, 2010 14:42

If you received or will be receiving Social Security benefits, you should know that some or most of the Social Security benefits may be subject to the income taxes.  Depending on your taxable income, up to 85% of your Social Security benefits may be taxable.  Here are some facts that will help you determine whether your Social Security benefits are taxable.

Your total taxable income determines what portion of your Social Security benefits is taxable.
So if your only income during the year was from Social Security benefits, 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: investment income, dividend or interest income, you withdrew money out of qualified retirement accounts such as an IRA or you had a part-time job, your Social Security benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status.
The 2009 base amounts are:
  • $32,000 for married couples filing jointly.
  • $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 spouses at any time during the year.
  • $0 for married persons filing separately who lived together during the year.
For example, if your filing status is married filing jointly, and you and your spouse received $30,000 in combined Social Security benefits.  You also received taxable dividend income of $10,000 and you withdrew $40,000 from your IRA in the same year; based on the above facts your Social Security benefits will be taxable.
For additional information on the taxability of Social Security benefits see Publication 915, Social Security and Equivalent Railroad Retirement Benefits.
Posted in:Personal Tax ArticlesThis article was written by TaxBizPro, LLC 2023, all rights reserved ©.  

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