WIDOWED this year

[Lori_E]

1) I was widowed on April 17, 2024, and I have these questions. 

Am I able to designate that I am filing as a widow even tho it was less than half the year? 

2) I am self-employed and have been collecting spousal survivor benefits since May. 

1. What are the limits of AGI before they take money back for overpayment 
2. What is the limit before the SS is taxed?
3. If there is an over amount paid of SS, when does SS figure that out and contact you? 

[VolvoGirl]

For 2024 you still file a Joint return as normal.  You will get a SSA-1099 from Social Security to enter into your tax return.  Was your husband getting Social Security?  You also enter his SSA-1099.

You can file a Joint return as normal the year your spouse died. For the next two years following a husband's or wife's death, the surviving spouse can file as a qualifying widow or widower if they have a qualifying child. That basically lets you continue to use the same tax brackets that apply to married-filing-jointly returns. After the year of death if you don't have a child you file as Single. And then next year start over with a new return and new account.

See How to file if your spouse recently died
https://ttlc.intuit.com/turbotax-support/en-us/help-article/small-business-processes/file-return-spo...

For Social Security 

Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

If you are over full retirement age your actual ss checks won't be reduced. Otherwise they will actually reduce your payments if you make too much other income in the prior year. See SS FAQ for working after retirement

https://www.ssa.gov/benefits/retirement/planner/whileworking.html

[KarriC]

1)

Surviving spouses who do not remarry in the year their spouse dies can file Married Filing Jointly the year of the spouse’s death. For the two years following the year of death, the surviving spouse may be able to use the Qualifying Surviving Spouse (formerly called Qualifying Widow/Widower) filing status.

Tax rates for qualifying surviving spouse and for married filing jointly are the same. They are the lowest tax rates and usually result in the lowest total tax.

You can claim the Qualifying Surviving Spouse filing status if all the following conditions are met:

• You were entitled to file a joint return with your spouse the year of your spouse’s death.
• Have had a spouse who died in either of the two prior years. You must be unmarried.
• Have a child, stepchild, or adopted child who qualifies as your dependent for the year.
• Live with this child in your home all year, except for temporary absences.

If you do not have a dependent child, you would file your taxes in one of the following status:

• Single
• Head of Household if you have a qualifying dependent (not a child), can’t be claimed on someone else’s return, and are considered unmarried
• Married filing jointly or separately if you remarry

2)

1. Overpayment of SS can be caused by many things, including: your income is more than you estimated, your living situation changes, your marital status changes, you have more resources than the allowable limit, you are no longer disabled and continue to receive benefits, you do not report a change to SS as required, or SS has incorrectly figured benefits because of incorrect/incomplete information.

         I am including a link to the SSA’s information on Overpayments and suggest you contact the SSA for         

        more indepth Social Security questions.

2. Social Security is not taxable if it is your only source of income. If you have other sources of income, up to 85% of your Social Security may be taxable. Currently, you will pay tax on your Social Security benefits in the following situations:

• File single – and your combined income (see note below) is between $25,000 and $34,000, up to 50% of the SS benefits may be taxable. If you make more than $34,000, up to *5% of your SS may be taxable.
• File jointly – and your combined income (see note below) is between $32,000 and $44,000, up to 50% of the SS benefits may be taxable. If you make more than $44,000, up to 85% of your SS may be taxable.
• File separately but are married – you will most likely pay taxes on your SS

NOTE: Combined Income is: Your adjusted gross income + nontaxable interest + ½ of your Social Security benefits = Combined Income

3.   If there’s an overpayment by the SSA, the SSA will send you a notice explaining the overpayment and will ask for a full refund within 30 days. Further information can be found from the link in question 2) 1.

Please accept our sympathies for your loss.                    

[Lori_E]

If I file "Married Filing Jointly" this year (as a widow), how does that affect the additional SS income?
I don't see this scenario listed. 

It also doesn't make sense that the more your combined income is, the less you are taxed on it (5% as opposed to up to 50%) 

Please clarify. 

Thank you. 

[VolvoGirl]

They made a typo.  The * should be a 8.   Up to 85% can tax taxable.  

[Lori_E]

Makes sense. 

What about the first reply question? 

If I file "Married Filing Jointly" this year (as a widow), how does that affect the additional SS income?
I don't see this scenario listed. 

[FranklinF]

Approximately 40% of people who get Social Security are required to pay federal income taxes on their benefits. The above takes place when you have OTHER INCOME in addition to your Social Security Benefits that is SIGNIFICANT,  such as : wages, earnings from self-employment, interest, dividends, and other taxable income that must be reported on your tax return.

You will pay tax on your 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
  • Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits.
  • More than $34,000, up to 85% of your benefits may be taxable.
• File a joint return, and you and your spouse have a combined income* that is
  • Between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits.
  • More than $44,000, up to 85% of your benefits may be taxable.
• Are married and file a separate tax return, you probably will pay taxes on your benefits.

* Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your "combined income"

Income Taxes and Your Social Security Benefit 

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[KarriC]

Oh my, I missed that error! My apologies and thank you @VolvoGirl for the explanation for my error. Fat fingers! Yes, the asterisk (*) should have been an "8". Up to 85% may be taxed.

[KarriC]

Thanks for your follow up questions, my apologies for the typing error in my original post. Of course it doesn’t make sense the more your combined income is the less you are taxed on it! The asterisk (*) should have been an “8”. Again, apologies for my error!

Regarding “how does Married Filing Jointly affect the additional SS income”, I will answer this with two different assumptions:

1. I will assume you are talking about your deceased spouse’s SS benefits.
2. I will assume you are talking about SSI (Supplemental Security Income)

1.

Your social security benefits and those of your spouse will be entered on your tax return as SS benefits. You will enter any other income you received during the year including self-employment, gig work, any work you got paid for, and investment income.

As Married Filing Jointly, in 2024 the standard deduction is $29,200 for a married couple filing jointly. There is an additional standard deduction for the elderly or blind.

You will pay tax if you have significant income (meaning you have a job, are self-employed, gambling winnings, etc.) in addition to your SS benefits.

The tax will be calculated based on the tax tables for your filing status. If you and your spouse receive Social Security, there is no special way to handle computing the tax liability.

2.

SSI is a benefit paid monthly to people with limited income and resources who are blind, age 65 or older, or have a qualifying disability. Since these funds are administered by the Social Security Administration, and not the IRS, I am including links to Social Security information that may apply to you.

I found the following information on the SSA.gov site regarding SSI benefits:
HOW DOES YOUR INCOME AFFECT YOUR SSI BENEFIT?

Step 1: We subtract any income that we do not count from your total gross income.  The remaining amount is your "countable income."

Step 2: We subtract your "countable income" from the SSI Federal benefit rate.  The result is your monthly SSI Federal benefit as follows:

1)   Your Total Income
- Your income that we do not count
= Your countable income

2)   SSI Federal benefit rate
- Your countable income
= Your SSI Federal benefit

If you click on the link, there are examples for different situations (e.g. SSI Fed benefit with only earned income, SSI Fed benefit and State supplement with only unearned income) that may further your understanding of how your SSI is calculated (looks a bit tricky!)

If I did not answer your question above and you do not find the answer to your question in the SSA’s literature, I strongly suggest contacting them directly. (SSA contact link) Although the SSA and IRS are both government agencies, they act independently. We’re always able to answer IRS Tax related questions.

SSA - Receiving Benefits While Working

SSA - What happens if I work and get Social Security retirement benefits?

SSA – Retirement Earnings Test Calculator

SSI – Frequently Asked Questions

SSI – Will my income affect my SSI payments?