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Income Taxes and Your Social Security Benefits

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Income Taxes and Your Social Security Benefits

David Vinokurov, District Manager, Trenton, NJ, Social Security Administration

With tax season upon us, many of you have asked about Income Taxes And Your Social Security Benefits. Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

Note: No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an “individual” and your combined income* is
  • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $34,000, up to 85 percent of your benefits may be taxable.
  • file a joint return, and you and your spouse have a combined income* that is
  • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
  • more than $44,000, up to 85 percent of your benefits may be taxable.
  • are married and file a separate tax return, you probably will pay taxes on your benefits.

 

How can I get a form SSA-1099/1042S, Social Security Benefit Statement?

An SSA-1099 is a tax form we mail each year in January to people who receive Social Security benefits. It shows the total amount of benefits you received from Social Security in the previous year so you know how much Social Security income to report to IRS on your tax return.

If you are a noncitizen who lives outside of the United States and you received or repaid Social Security benefits last year, we will send you form SSA-1042S instead.

Note: The forms SSA-1099 and SSA-1042S are not available for people who receive Supplemental Security Income (SSI).

If you currently live in the United States and you need a replacement form SSA-1099 or SSA-1042S, we have a new way for you to get an instant replacement quickly and easily beginning February 1st by:

Withholding Income Tax From Your Social Security Benefits

 

You can ask us to withhold federal taxes from your Social Security when you apply for benefits.

If you are already receiving benefits or if you want to change or stop your withholding, you’ll need a form W-4V from the Internal Revenue Service (IRS).

You can download the form, or call the IRS toll-free number 1-800-829-3676 and ask for Form W-4V, Voluntary Withholding Request. (If you are deaf or hard of hearing, call the IRS TTY number, 1-800-829-4059.)

When you complete the form, you will need to select the percentage of your monthly benefit amount you want withheld. You can have 7%, 10%, 15% or 25% of your monthly benefit withheld for taxes.

Note: Only these percentages can be withheld. Flat dollar amounts are not accepted.

 

Sign the form and return it to your local Social Security office by mail or in person.

If you need more information

If you need more information about tax withholding, read IRS Publication 554, Tax Guide for Seniors, and Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

If you have questions about your tax liability or want to request a Form W-4V, you can also call the IRS at 1-800-829-3676 (TTY 1-800-829-4059).

 

It’s Tax Time- How to Get Volunteer Tax Help

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Volunteer Tax Help

Yes, it is time to think about filing your 2011 tax returns. It’s a job that is never a joy, but could be less of a hassle, if you try using a terrific free service Рthe Volunteer Income Tax Assistance program (VITA). 

 For over 30 years, the VITA force of 2,000+ volunteers has helped more than 2 million households file basic tax forms.  This program offers free tax help to people who cannot afford professional assistance (generally those with incomes under 49,000). Volunteers help prepare basic tax returns in community and neighborhood centers, libraries, schools, and other community locations.

A recent focus of the program is to encourage taxpayers to file their returns, federal and State, electronically. Each year the number of taxpayers that take advantage of this method continues to grow.

 According to the IRS website the following are the items you should bring to have your tax return prepared:

  • Proof of identification
  • Social Security Cards for you,¬†your spouse and dependents and/or a Social Security Number verification letter issued by the Social Security Administration
  • Birth dates for¬†you, your spouse and¬†dependents on the tax return
  • Current year‚Äôs tax package if¬†you received one
  • Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
  • Interest and dividend statements from banks (Forms 1099)
  • A copy of last year‚Äôs Federal and State returns (if available)
  • Bank Routing Numbers and Account Numbers for Direct Deposit
  • Total¬†paid for¬†day¬†care provider and the day care¬†provider’s¬†tax identifying number¬†(the provider’s Social Security Number or the provider’s business Employer Identification Number)

To file taxes electronically on a married filing joint tax return, both spouses must be present to sign the required forms.

To locate the nearest VITA site, call 1-800-829-1040 or contact your local Office on Aging, you can find the # for your County office by visiting www.njfoundationforaging.org/services.html or call 1-877-222-3737.