How to Pay Taxes on Social Security Retirement Income
According to the Social Security Administration, retirees receiving income from sources in addition to Social Security benefits may have to pay taxes on these benefits. A retiree can have taxes withheld from their monthly Social Security benefits or make quarterly estimated tax payments to the Internal Revenue Service. The other option is to pay taxes on Social Security benefits when completing a federal income tax return.
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Things You'll Need
- Social Security Benefit Statement (Form SSA-1099)
- Amount of total income
- Amount of tax exempt interest
- IRS Form 1040A or 1040
Instructions
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Calculate your combined income from the tax year. The combined income is equal to the amount of your total taxable income plus the amount of tax exempt interest plus one-half the amount of your Social Security benefits as indicated by Form SSA-1099.
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Compare your combined income to the IRS base amount for your filing status. This comparison will indicate whether a portion of your Social Security benefits is taxable. For 2008, the IRS base amounts were $25,000 for individuals, $32,000 for a married couple filing jointly and $0 for a married person filing separately.
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Review the IRS Tax Tip for choosing the correct form to use for filing your federal tax return. The IRS recommends using the simplest form possible to simplify the filing process. Most people will be able to use Form 1040EZ or Form 1040A.
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Complete your federal tax return by filling out and signing the chosen form.
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Open a web browser and navigate to the IRS list of addresses for individual taxpayers. Find a link in References. Click on your state.
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Mail your completed federal tax return form along with relevant documentation and payment to the address indicated.
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Tips & Warnings
The Social Security Administration Benefits Planner website provides a formula for estimating the percentage of Social Security benefits subject to taxes. Find a link in References.
