Your Social Security Benefits Might Be Taxable
A new tax season has officially arrived, so taxpayers should consider brushing up on this year’s credits, deductions, and extensions. It’s also important to remember that those receiving Social Security benefits may be required to pay federal income taxes on a part of those benefits. To learn more about what types of taxes you may need to pay this year, consider reaching out to an experienced Florida tax lawyer today.
Social Security Benefits
Social Security is a part of the retirement plan for most U.S. workers. It provides replacement income for retirees in an amount based on their lifetime earnings. The Social Security program also offers monthly payments in the form of survivor and disability benefits. Whether or not these benefits are taxable depends on a few different factors, including the taxpayer’s income and filing status. For help determining whether you owe taxes on your Social Security benefits, reach out to our legal team today.
Are Your Benefits Taxable?
To determine if their Social Security benefits are taxable, taxpayers will need to take half of the money they collected (in Social Security benefits) that year and then add it to their income. Wages, pensions, interest, dividends, and capital gains must also be included in this calculation. Those who are filing singly and whose income exceeds $25,000 can expect to be required to pay a portion of that income in taxes. Those married and filing jointly, on the other hand, will need to take half of their benefits, plus half of their spouse’s benefits and then add those amounts to their combined incomes. If that total exceeds $32,000, then part of their Social Security benefits may be taxable.
How Much Will I Have to Pay in Taxes?
How much of a person’s benefits are taxable depends on their income. For instance, individuals who fall under the following categories can expect around 50 percent of their benefits to be taxable:
- Taxpayers filing singly, as head of a household, or as a qualifying widow or widower with $25,000 to $34,000 in income;
- Taxpayers who are married, but filing separately or who lived apart from their spouses in 2020 and who earned between $25,000 and $34,000 in income; and
- Married taxpayers who are filing jointly and who earn between $32,000 and $44,000 in income.
On the other hand, up to 85 percent of a taxpayer’s benefits could be taxable if he or she is:
- Filing singly, as a head of household, or as a qualifying widow or widower who has more than $34,000 in income;
- Married and filing jointly and has more than $44,000 in income;
- Married, filing separately, and lived apart from his or her spouse for all of 2021 and earned more than $34,000 in income; or
- Married, filing separately, and lived with a spouse during 2021.
For help determining if you fall under one of these categories, reach out to our office today.
Set Up a Meeting with Our Legal Team
If you have questions about what kinds of taxes you could owe this year, call experienced tax lawyer, CPA, and former FBI Special Agent Ronald Cutler, P.A. for help. You can set up a free, one-on-one consultation by calling our office at 386-490-9949 today.