Pension is being counted as earned income for Social Security Taxes

[ldruth61]

Read this 

Benefits Planner: Retirement | What Income is Included in your Social Security Record? | SSA

[ldruth61]

your 915 link refers to SS and Railroad Retirement benefits

  Social
Security
and
Equivalent
Railroad
Retirement
Benefits

[DoninGA]

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@ldruth61 wrote:

Read this 

Benefits Planner: Retirement | What Income is Included in your Social Security Record? | SSA

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Your pension income is not being taxed.

Your question is how the Social Security benefits you receive and are reported to you on SAA-1099 are taxed.

As has been stated, the benefits 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 would read the IRS Publication 915 Social Security and Equivalent Railroad Retirement Benefits starting on page 6 How Much Is Taxable? and the examples provided, you will see how the benefits are taxed on a US Federal Tax Return Form 1040 - https://www.irs.gov/pub/irs-pdf/p915.pdf#page=6

[ldruth61]

My pension is not from the Railroad. Where did I ever say that?

[ldruth61]

Nowhere on your link does it say that pensions are earned income and therefore apply towards taxing your SS. 

[DoninGA]

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@ldruth61 wrote:

My pension is not from the Railroad. Where did I ever say that?

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That is just the name of the IRS publication.  It covers both Social Security and Railroad Retirement Benefits.

[DoninGA]

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@ldruth61 wrote:

Nowhere on your link does it say that pensions are earned income and therefore apply towards taxing your SS. 

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Sorry, apparently you do not understand the difference between pension income not being eligible for Social Security taxation and the Social Security benefits received being taxable.

It is obvious we cannot help you with this matter.

[ldruth61]

Yes my pension is being taxed. That I know is true. What is not true is that it should not be included in earned income when calculating the taxes on SS.

I never asked this question as you stated.

Your question is how the Social Security benefits you receive and are reported to you on SAA-1099 are taxed.

My question has been the same from the beginning. WHY IS TURBO TAX INCLUDING MY PENSION AS EARNED INCOME WHEN CALULATING TAXES ON MY SS and how do you correct it!

[ldruth61]

OH but I do understand the difference, it's you guys that are not getting it.

I completely understand my pension benefits are not eligible for SS taxation and that it does not apply to my SS benefits being taxed.

Very clear, so what is it you don't understand?

[Opus 17]

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@ldruth61 wrote:

My question has been the same from the beginning. WHY IS TURBO TAX INCLUDING MY PENSION AS EARNED INCOME WHEN CALULATING TAXES ON MY SS and how do you correct it!

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Earned income is not the basis for determining the taxability of your benefit.  All your taxable income applies.  "All", not "earned".

We showed you the instructions and the worksheets.  Go find someone else to do your taxes. 

[BigPopaE]

Everyone is missing the point of the question.

Pensions are taxable. Everybody gets that.

The SSA does not count pensions as wages earned when you draw your social security benefits. Therefore you should have no reduction in benefits. What was pointed out was a glitch in TurboTax that did not recognize that pensions should not be included.

SSA pamphlet ‘How Work Affects Your Benefits’  page 4

[ldruth61]

BigPopaE

Has the glitch been fixed? I when in to try and do an amendment and it did not change anything. How to I get this corrected?

Thanks

Dean

[SteamTrain]

@BigPopaE    @ldruth61 

Sorry guys....it is the both of you who are not getting it.

This is a long-established SS benefits procedure, AND TTX is getting it correct, and has been correct for many years.

1)  Issue #1:  Yes, SS says that If you have too much "earned income" from an actual job before you reach "Full" retirement age...then SS will actually reduce the $$ that SS sends you monthly the next year.   It is correct that pensions are not included in this....but that reduction is not displayed on your current tax return itself, because it is not an actual income tax....it happens by SS actually not sending you some $$ the next year's monthly SS benefit payments to you. 

2) Issue #2:  The "up-to" 85% tax on your SS benefits.  That is a separate tax that IS included on your current tax return.   For that actual current income TAX assessed on the SS benefits that you did receive from SS, that "income tax" IS assessed on your current tax return, and does include all your other taxable income, including pensions, to determine whether any of your year's SS income will be taxed this year.

Can #1 and #2 result in a double-hit to your SS benefits? 

 Yep, sure can...until the year after you reach full SS retirement age. 

But TurboTax only deals with calculating issue #2.   

The SSA will deal with #1 separately from your tax return.

[Opus 17]

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@ldruth61 wrote:

BigPopaE

Has the glitch been fixed? I when in to try and do an amendment and it did not change anything. How to I get this corrected?

Thanks

Dean

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There is no glitch.

Your tax return does not reduce your benefit.  Only the social security administration does that.  If you have earned income, the social security administration may reduce your next year's benefit, according to their rules.  This is not computed on your tax return, and neither the IRS nor Turbotax has anything to do with the amount of your benefit.

Your tax return taxes the benefit you already got, and that is based on total income, not earned income.