Q & A
How Are Social Security Benefits Taxed?
Answer: One thing that many new retirees forget is that they may need to pay taxes on a portion of their Social Security benefits. These benefits include monthly retirement, disability, and survivor payments — but not supplemental security income (SSI) payments, which are not subject to taxation. Whether or not you will owe taxes on your Social Security benefits depends on your filing status and your income level. Although many people find that they aren’t required to pay taxes on their benefits, it is possible that up to 85% of the Social Security benefits you receive may be considered taxable income.
The Social Security Administration will mail you Form SSA-1099 each January, which tells you exactly how much you received in Social Security benefits during the previous year. You will need this information to file your taxes and to calculate how much of your Social Security benefits are taxable. [NOTE: If you need to obtain another copy of your SSA-1099 form, you can request it using the Social Security Administration website.] Read more…
Source: Jason Summers – US Tax Center, via irs.com/articles/how-are-social-security-benefits-taxed – 10/9/2014