IRA Deduction not a Roth

[cbyerley31958]

I'm over 65, onle get SS income want to withdraw money is it taxable?

[xmasbaby0]

The money you take out of a retirement account must be entered on your tax return.   We cannot say if you will pay tax since you have not mentioned how much you will withdraw.  When you have other income--including distributions from retirement accounts, then your Social Security can become taxable, and the retirement income itself may also be taxed, depending on your total amount of income.

You will receive a 1099R for the money you take out of the IRA, which must be entered on your tax return.  They send the 1099R at the end of January/early February.  

And of course you will also enter your SSA1099 from Social Security into the return.

Go to Federal> Wages & Income>>Retirement Plans and Social Security  (SSA1099 and 1099RRB) to enter your SSA1099.

To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.

Up to 85% of your Social Security benefits can be taxable on your federal tax return.  There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits.  When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable. 

 What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2019 it was $17,640— for 2020 it was $18,240; for 2021 it was  $18,960.  For 2022 it was  $19,560  —  for 2023 $21,240)

After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare.  If you work as an independent contractor then you will pay self-employment tax for Social Security and Medicare.

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2022 Form 1040

https://ttlc.intuit.com/questions/1899144-is-my-social-security-income-taxable

https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable

You need to file a federal return if half your Social Security plus your other income is $25,000 when filing single or head of household, or $32,000 when filing married filing jointly, $0 if you are filing married filing separately.

Some additional information:  There are 11 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont  These states offer varying degrees of income exemptions, but two mirror the federal tax schedule: MN and VT.

[Opus 17]

The withdrawal is considered taxable income, but how much tax you actually pay depends on your other income, your filing status, and other factors.  If you are single, and your only other income is social security, you should be able to withdraw about $13,000 per year from the IRA without paying income tax.  More than that, and you will start to pay tax on the IRA and also part of your social security benefit will become taxable.