Capital Gains and how they effect how much of my Social Security benefits are taxed.

 Hi @JWAmpsOnly!

 Thanks for your question! I'd be happy to give you some guidance.

• If you have a net capital gain for the tax year, then yes, it would need to be included in your total "combined income" for purposes of determining how much of your Social Security benefits are taxed.
• The IRS has a great tool you can use to determine what portion, if any, of your benefits will be taxed. Here's a link to the applicable IRS Interactive Tax Assistant: https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable
• Here is another IRS link where they specifically say that capital gains are included: https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable
• Note that if you have a carryforward capital loss from a prior year, that could impact your net capital gains for the next year. For example:
  • Let's say that you have $15k of net capital losses in 2022, of which $3k you could deduct that tax year.
  • $12k would carry forward.
  • In 2023, you have a net capital gain of $4k.
  • But since you have a carryforward loss, you can completely wipe out that $4k and get to take on an additional loss of $3k.
  • Your carryforward to 2024 is now $5k (but that is really not important to this discussion).
  • For tax year 2023, you wouldn't have any capital gains to report, and instead, a loss of $3k; that could impact how much of your 2023 social security benefits are subject to tax.

I hope this information is helpful, @JWAmpsOnly ! I'll stay tuned in case you have a follow-up question. Thanks again!