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Get your taxes done using TurboTax
Congratulations on receiving social security!
In response to your questions:
#1 and #2) Yes, your self-employment earning could impact whether or not your social security benefits are taxable. Since you are losing the home office deduction, there are other business deductions that you may be eligible to deduct, as well as, any health care premiums and retirement account contribution. Although contributing to a ROTH will not lower your net earnings, you may want to consider other retirement account contributions, such as, to an IRA, SEP, Solo 401k, etc.
I am providing you with some additional resources regarding business deductions and comparing types of retirement contributions:
- Top Write offs for Self-Employed: https://turbotax.intuit.com/tax-tips/self-employment-taxes/top-tax-write-offs-for-the-self-employed/...
- Comparing Retirement accounts: https://turbotax.intuit.com/tax-tips/retirement/tax-benefits-of-retirement-accounts-comparing-401ks-...
- What to know about SEP IRAs as a Self-Employed person: https://blog.turbotax.intuit.com/self-employed/self-employed-heres-everything-you-need-to-know-about...
#3) The Social Security cost-of-living adjustment (COLA) for 2024 is 3.2%. These increases are automatic. The Social Security Administration calculates the annual COLA in October, and you'll see the increase in your payments starting the following January. So, your 2024 Social Security amounts that you receive will be higher than 2023. Social security also adjusts the income thresholds governing taxable amounts. For 2023, the thresholds are:
- You will pay tax on only 85 percent of 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 percent of your benefits.
- more than $34,000, up to 85 percent 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 percent of your benefits.
- more than $44,000, up to 85 percent of your benefits may be taxable.
Here is the link to Social Security: https://www.ssa.gov/benefits/retirement/planner/taxes.html
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