First year claiming Social Security and working in same year

[xmasbaby0]

First year of receiving SS

https://faq.ssa.gov/en-US/Topic/article/KA-

[VolvoGirl]

@BCD2  Go back and read this whole thread from the beginning.  We have tried to explain it.  It is confusing to people.  There are 2 different things.  Your actual SS checks won't be reduced but your SS may be taxable depending on your other income for the whole  year.  

[Len62]

Deleted incorrect post.

[VolvoGirl · Accepted solution]

Does not count for what?   Your tax return only reports the taxable amount of SS depending on your total income for the year.  Not for the first year working.   Did you read this whole thread?  We have tried to explain it.  

Turbo Tax doesn't get involved with how much benefits you can get or how much income you can earn. That isn't part of your tax return. That is just with SS sending you the benefit checks. Your SS benefits can still be taxable.

There are 2 different things to know about social security. People get them mixed up all the time. Social Security is saying your SS checks may be REDUCED. Not if it's taxable or not.

1. Your actual SS checks

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

First year special rule
https://faq.ssa.gov/en-US/Topic/article/KA-01927?msclkid=11bc282ccf2211ecb65078152b05ae6b

See page 5 for the special first year rule
https://www.ssa.gov/pubs/EN-05-10069.pdf

2. Income Tax (even the first year).

For any age 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

[Len62]

Deleted incorrect info.

[Len62]

Page 5 states that your SS is taxable if you exceed $1950 in earnings in any month you get a SS check. It doesn't say whether it's taxable. Got it.

[VolvoGirl]

Where does it say SS is taxable?   That just says that SS will send you a check if your earnings are less than 1950 for a month.  

[Len62]

What I think I'm going to do is to put $0 for taxable social security in line 6a instead of the amount listed on the 1099. Then I'll simply document the months I made the other income to show that I didn't exceed the special monthly limit for those months I started getting SS, in case of audit. I'm still looking for an IRS form that is used to document this special rule situation.

[Len62]

The $1950 replaces the annual limit used to determine how much of your SS is taxable. Below $1950, SS isn't taxable for that month. Is that wrong?

[Len62]

I'm starting to understand where I went wrong now. My question is now, as a married person is the income used to add to half my SS, both mine and my spouses? Since there's a limit for married filing jointly, I suspect it is. 

[VolvoGirl · Accepted solution]

Yes if you file a Joint return.     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

To see the Social Security Benefits Calculation Worksheet in Turbo Tax Online version you would have to save your return with all the worksheets to your computer. Or if you are using the Desktop CD/Download Software you can switch to Forms Mode (click Forms in the upper right) and click on SS in the list on the right side.