If you are still working when you receive Social Security benefits and you have income from other sources, it is possible that a portion of your Social Security income will be taxable. You must have started a Tax Return on eFile. Sign In. Generally, if your Social Security benefits are your only source of income , then they are usually not considered taxable income and thus not taxed. If you receive Social Security benefits, you will be sent a Form SSA , which will show the total dollar amount of your Social Security income for the given tax year.
Whether or not your Social Security income is taxable - and how much is taxable - depends on your total income from all sources and your IRS tax return filing status. The easiest and most accurate way to find out if you need to pay taxes on your Social Security income for the current Tax Year is to start a free tax return on eFile.
The eFile. Based on the information you provide through the online tax questions via information from your Form SSA and other income sources e.
W-2, if you have them, we will then determine whether or not you have to pay taxes on your Social Security income. As a result, the eFile.
If you need more information on Social Security and how it affects your tax return, see the information below. Generally, your Social Security income will only be taxed if you have income from other sources and your combined income is more than a certain base amount.
If Social Security is your only source of income, then typically you do not need to file a tax return. Of course, there may be other reasons that you need to file a return. The above would be considered an other source of income and if you have any of these, then most likely you will need to file a tax return along with your social security benefits.
Below are samples that should help you better understand different scenarios with social security income. Example 1 - Randy will be filing with a single filing status on his return. Example 2 - John and Denise are married and will be filing with a married filing joint filing status on their return. In their case, none of John's social security income is taxable. Example 3 - Sue and Joe are married and will be filing with a married filing joint filing status on their return. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.
How the IRS Taxes Social Security Despite popular belief that you age out of taxes when you reach a certain age, your Social Security benefits remain taxable as long as you live.
Which States Tax Social Security? State Taxability Colorado Some or all benefits may be taxable. Those 55 years of age or older are exempt from taxation. How to Reduce Your Social Security Tax Liability If you expect you may owe taxes on your Social Security benefits, there are a few things you can do to potentially minimize them.
Reduce business profits: If you own a business, you can reduce your tax liability by taking advantage of business tax write-offs you may be entitled to.
Limit retirement withdrawals: You may also want to consider reducing your withdrawals from retirement income to reduce your tax liability, but you should consider the required minimum distribution RMD rules while doing so.
Sell capital assets strategically: If you own capital assets, such as stocks, bonds or real estate, you should discuss with a tax professional the best time to sell your assets. Any capital assets sold at a loss can reduce your overall income. Any assets sold at a gain may be subject to capital gains taxes , depending on how long you held them.
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Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. It is not part of Social Security benefits and does not figure into the taxable benefit formula.
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