If you are planning for retirement, it pays to understand your potential tax liabilities. This means paying attention to all of your income streams that will pay for your living expenses during your retirement years.
Social Security taxes are often misunderstood and they can be a little complicated. It’s a good idea to sit down with a tax professional or your financial advisor to discuss your specific situation. This will help you understand your tax expectations when it comes to Social Security benefits. In this article, we will highlight a few of the key facts and figures that determine Social Security taxes.
Combined income and marital status will play significant roles when it comes to Social Security taxes. Here are a few points to consider:
Single Filing Status:
- Single with total combined income between $25,000 and $34,000: Up to 50 percent of your Social Security benefits can be taxed.
- Single with combined total income of more than $34,000: Up to 85 percent of your Social Security benefits can be taxed.
Married Filing Status:
- Married filing jointly with combined total income between $32,000 and $44,000: Up to 50 percent of Social Security benefits can be taxed.
- Married filing jointly with combined total income of more than $44,000: Up to 85 percent of your Social Security benefits can be taxed.
About Form SSA-1099
If you are already receiving Social Security benefits, then you will get your Social Security Benefit Statement (Form SSA-1099) in January of each year. This will help you determine how much of your benefits are taxable. Keep this form with your tax records because you’ll need it when you file your tax returns.
For help with filing your taxes and to get a better understanding of your Social Security tax liabilities, contact Ferguson, Timar & Company. Our experienced tax experts can guide you through the process and make sure your taxes are prepared properly.