When it comes time to file their taxes, many Social Security recipients are unsure if their benefits are considered income.
A person’s overall income is a factor in determining whether or not benefits are counted as income.
In order to maintain a certain standard of living after retirement, many people reduce their work hours or stop working altogether.
Social Security and the fourth payment of the Stimulus?
Paying taxes on Social Security
Benefits and other taxable income will be added together to determine a person’s taxable income.
They will know if they have to pay income taxes once they have the final total.
Income limits for Social Security and taxes
In most cases, if a single taxpayer makes less than $25,000, they won’t be taxed on their benefits.
The combined income of a married couple cannot exceed $32,000.
Maximum 2022 benefit is $4,194
The Social Security Administration can tax up to 50% of your benefits if your combined income is between $25,000 and $34,000.
Benefits can be taxed up to 85% of their value if your income exceeds $34,000 for singles and $44,000 for married couples.
Filing for taxes on Social Security benefits
The Social Security Administration (SSA) will send you a Form SSA-1099 every year that details your benefits.
You can use this form to see if you are eligible to have your benefits taxed.
In order to avoid a large tax bill at the end of the year, you can report your income quarterly or have taxes deducted from your benefits.
Form W-4V must be submitted to the IRS in order to have your taxes withheld.