Do I Have to File Taxes If I Get Social Security Benefits & That Is All of My Income?
When approaching filing season, the most important thing to determine is whether you're required to file a return. If your only income is Social Security, then the answer is probably no. However, the Internal Revenue Service has a comprehensive worksheet that calculates whether your Social Security income is subject to income tax. If your income is subject to tax and you are required to file, then there are a few other tax facts that you should take into consideration in order to make filing your taxes less stressful.
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Income Tax
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According to the Social Security benefits planner, you are not taxed on Social Security if it is your only source of income. This is simply because most taxpayers do not meet the income-tax filing requirements unless they receive substantial income in addition to their Social Security benefit amount. If you are an individual filer -- single, head of household, married filing separate or qualifying widow -- and your combined income is between $25,000 and $34,000, then you may be taxed on up to 50 percent of your benefits. If your are a single filer and you earn in excess of $34,000, then up to 85 percent of your benefits may be taxable. Joint filers may be subject to tax on up to 50 percent of their benefits if they earn between $32,000 and $44,000. Up to 85 percent of their benefits may be subject to tax if they earn in excess of $44,000.
General Filing Limit
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At the time of publication, taxpayers over 65 are allowed a slightly higher filing limit than ordinary taxpayers. Taxpayers over 65 are not required to file unless their gross income is at least $10,750 if single; $13,450 for head of household; $20,900 for married filing jointly; or $16,150 for qualifying widow or widower. The income-filing limit for married people filing separately, $3,650, is the same for taxpayers of any age. However, general filing limits are based on your taxable income, and not all of your Social Security is subject to tax. All income amounts are valid as of the time of publication.
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Determining Tax on Social Security
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Use worksheet 1 found in IRS publication 915 to figure your taxable benefits. Before you begin worksheet 1, obtain your SSA-1099. Report your total benefits -- found in box 5 of your SSA-1099 -- on line 20a of form 1040 and report the taxable portion on line 20b. If you file form 1040A, report the total amount of your benefits on line 14a and the taxable portion on line 14b.
Considerations
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Even if you are not required to file an income-tax return, it may be in your best interest to do so. For example, if you had federal tax withheld from your benefit payments, then you should file so that you are refunded the money that you paid.
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