Social Security Income Tax Filing Help

The Social Security Administration reports that about one-third of recipients pay income taxes on Social Security benefits. If you are in the 33 percent and have not previously had to file income taxes while collecting Social Security, you may be concerned. You must have income other than Social Security retirement to have any tax liability with the Internal Revenue Service.

Combined Income

• You may pay taxes on Social Security retirement income if your combined income is over $25,000 a year as a single filer or $32,000 a year as a joint filer. Combined income calculations use your adjusted gross income from your IRS Form 1040 and add your nontaxable interest and 50 percent of your Social Security benefits. This figure determines whether you owe tax on Social Security retirement benefits.

Filing

• If you are over age 65 and your gross income was less than $10,750, you do not have to file a tax return unless some unusual condition exists that require it. If you are married filing jointly and one spouse is over 65 and the other under 65, the filing limitation is $19,800. If both spouses are over age 65, the gross income limit is $20,900.

  Even if you do not have to file a federal income tax return, it may be to your advantage to file if you are entitled to a refund from the IRS or if there are credits available to you.

Help

• The Internal Revenue Service provides help through two programs, the Volunteer Income Tax Assistance program, and Tax Counseling for the Elderly. VITA provides volunteers to assist those with income below $49,000. Most towns and all larger cities have this service available at various locations after the first of each year. The IRS directs TCE for taxpayers age 60 or older. As part of the TCE program, AARP provides the Tax-Aide program in 7,000 locations nationwide. Other non-profit organizations provide similar help.

Considerations

• If you are over age 65, you cannot file IRS Form 1040-EZ. You must file the Form 1040-A or Form 1040. You cannot itemize deductions with the Form 1040-A, so you may choose to file the more complex Form 1040.

  The IRS provides a worksheet for Social Security calculations so you can determine the figures to put in the blanks. Social Security sends an SSA-1099 form after the end of the year with totals for your Social Security income. Use that form to complete the worksheet.

Misconceptions

• Even if you pay taxes on your Social Security retirement income, the maximum taxable amount is 85 percent of your Social Security funds, applicable to higher-income seniors. Single filers with a combined income over $34,000 and joint filers whose combined income is over $44,000 are in the 85-percent class for taxation of Social Security benefits.