By David Vinokurov Social Security District Manager n Trenton, NJ
Income Taxes And Your Social Security Benefits
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
o between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
o 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
o between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
o 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.
· Each January you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax.
· If you do have to pay taxes on your Social Security benefits, you can make quarterly estimated tax payments to the IRS or choose to have federal taxes withheld from your benefits.
· For more information about taxation of benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits.
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).
Please share this information with your clients, colleagues, students and the general public. If you are able, please post this information on your website or other social media sites.
Sincerely,
David Vinokurov
District Manager – Trenton, NJ
Social Security Administration
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