How to File Social Security Income Taxes

In the good old days, Social Security income was unconditionally tax-free. Unfortunately, that is no longer the case for millions who receive monthly benefits. Your Social Security income is now taxable under certain circumstances, and this article shows you how to file a tax return with income from this source.

Things You'll Need

• Form 1040

Instructions

1. Get a current Internal Revenue Service (IRS) 1040 form. One of the lines on the front will ask you for your total Social Security income. This number is given to you in Box 3 on your annual SSA-1099 income statement.

2. Be sure to subtract any Medicare premiums paid that are listed on your Social Security Administration statement. For example, if you have a total of $16,500 in Social Security income and paid $1,400 of Medicare premiums, then your total reportable Social Security income is only $15,100.

3. If you contributed to a traditional IRA and you or your spouse participated in any kind of qualified retirement plan, then you must use the worksheets in IRS Pub. 590 to find out if any of your benefits are taxable.

4. If you repaid more benefits the previous year than you received, then none of your benefits are taxable. Your statement will show both of these amounts.

5. If neither of these conditions apply to you, then you must use the worksheet on page 27 of the Form 1040 instructions, to find out if any of your benefits are taxable. Follow the instructions on page 27 and carry the final number over to line 20b on the 1040.

Tips & Warnings

• If you are using a computer program to prepare your return or are filing your taxes directly online, simply input the total amount of your Social Security benefits and the computer should be able to figure the amount of your taxable benefits automatically.

• This article is intended for educational purposes only and should not be construed as tax or financial advice. For more information, visit the IRS website or consult your tax or financial adviser.

Resources

• Social Security website
• IRS website