Tax lawyer Nick Nemeth offers some great tips that can help you with your taxes if you receive social security benefits. If you are a recipient of social security benefits, a portion of these benefits may be taxable. According to attorney Nick Nemeth many people have questions about their Social Security benefits. This area of tax requirements can be confusing. The following tips from the IRS can help you evaluate whether you owe taxes on the benefits that you received during the year. These tips can also help you identify the best method to file the tax return.
- Any social security benefits received in 2014 should generate form SSA-1099. in the mail. This form is a Social Security Benefit statement that will be mailed. It will show the exact amount of benefits received during the year.
- If the only income that you have for the year is Social Security benefits, they may not be considered taxable. It may not be necessary to file a federal tax return for the year, if this is the case. Income from sources other than Social Security benefits may cause some of the to be taxable.
- The IRS offers a free interactive tool that can help you determine whether the benefits you receive from the SSA are taxable To utilize the Interactive Tax Assistant, visit the IRS.gov website. The tool is available within the site.
- Take advantage of IRS Free File in order to prepare your tax return. It’s best to electronically submit it to the IRS at no cost. Taxpayers who earned less than $60,000 in the year can use brand name software from recognized companies who have partnered with the IRS to deliver this service. The software performs calculations for you and typically walks you through the process step by step to avoid any mistakes. Taxpayers who earn more than $60,000 can file electronically for free by using the Free File Fillable Forms available. Electronic versions replace paper forms offered by the IRS. This option is available at IRS.gov/freefile and is typically best for those who have experience doing their own tax returns.
- One simple way to determine if taxes are owed on Social Security benefits received. Is to Calculate 50% of the benefits received during the year. Add this amount to all the other income. Make sure to include any tax-exempt interest received in the total. Compare this amount to the base amount the IRS gives for your filing status. If the total of all other income plus 50% of your annual SSA benefit is more than the base amount allowed for your filing status, you could owe tax on some of the Social Security benefits.
- In order to determine whether any of your Social Security benefits are taxable you will need to know the base amounts for the different filing statuses.
- If you file married filing separately and you resided with your spouse at any point during the year in question, your base amount is $0.
- If your filing status is married filing jointly, your base amount is $32,000.
- If you file as single, married filing separately and did not live with your spouse at all during the year, qualifying widow or widower with a dependent child, or head of household your base amount is $25,000.