topic Re: social security in Get your taxes done using TurboTax

social security

perryc1958 — Wed, 30 Oct 2024 22:06:39 GMT

I am getting married next week, i am 66.2 years old and still working

Last year i filed single with a gross income of 110K

My question is i am considering taking my Social security next year which will add another 40K to my inclome, and my wife will only make less then 10K

So with SS estimating 160K

If i file married will i have a large tax burden because of the Social security

Thanks

Perry

Re: social security

xmasbaby0 — Wed, 30 Oct 2024 22:10:41 GMT

When you file a joint tax return, all of your combined income must be entered on that tax return, including both of your SSA1099's. If you file separate returns, MORE of the SS is taxable.

If you were legally married at the end of 2024 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $29,200 (+$1500 for each spouse 65 or older) for 2024. You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return.

Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states: AZ, CA, ID, LA, NV, NM, TX, WA, WI)

If you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice since with online, you get one return per fee.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separately

TAX ON SOCIAL SECURITY

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) For 2024, $22,320.

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 2023 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.

The tax laws for 2024 will change——for tax year 2024 Missouri and Nebraska will no longer tax SS

Re: social security

AmitaR — Wed, 30 Oct 2024 22:17:20 GMT

Hello perryc1958,

Congratulations!!

Up to 85% of your social security benefits can be taxable.

https://www-origin.ssa.gov/benefits/retirement/planner/taxes.html

Since your spouse has considerably less income, you would be better off filing Married Filing Joint.

Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!

Have an amazing day.

AR (CPA 10+ years)

Re: social security

marctu — Wed, 30 Oct 2024 22:35:52 GMT

Well congratulations! So based upon your income alone 85% of the Social Security benefit would be included as income, which puts you at about $154K.

The thing is that both the standard deduction and the tax brackets will be double. With your soon to be bride making about $10K, she had no taxable income when she was single. When you are married the standard deduction in 2024 is $29,200 plus $1,950 for age. That leaves taxable income of about $123K.

Tax brackets 2024: Married filing jointly

Tax rate	Taxable income bracket	Taxes owed
10%	$0 to $23,200.	10% of taxable income.
12%	$23,201 to $94,300.	$2,320 plus 12% of the amount over $23,200.
22%	$94,301 to $201,050.	$10,852 plus 22% of the amount over $94,300.
24%	$201,051 to $383,900.	$34,337 plus 24% of the amount over $201,050.
32%	$383,901 to $487,450.	$78,221 plus 32% of the amount over $383,900.
35%	$487,451 to $731,200.	$111,357 plus 35% of the amount over $487,450.
37%	$731,201 or more.	$196,669.50 + 37% of the amount over $731,200.

That is approximately $17,132 in tax in 2024. In 2023, when you were single your tax using your numbers and the standard deduction for single and age ($94,300 taxable income) was around $16,050.

Ultimately you will pay more in tax, but it is not nearly as much as you think it is, since you are getting married.

Again congratulations and thank you for the question @perryc1958

All the best,

Marc T.

TurboTax Live Tax Expert

27 Years of Experience Helping Clients

Re: social security

pkerr — Mon, 27 Jan 2025 18:17:33 GMT

@xmasbaby0

Regarding what you posted in your reply. You said that Missouri, as of 2024, will no longer tax Social Security earnings. That is correct and they also eliminated the AGI income limit from 2023.

That being said, I have entered all my tax info (except SS earnings) into TT and everything looks fine. However, when I enter my SS earnings, TT says I owe a bunch of Missouri state tax. I believe it's because it's taking my AGI from Federal and not taking into account that there is a good chunk of that AGI coming from SS.

Who can fix this?

Re: social security

xmasbaby0 — Mon, 27 Jan 2025 18:24:28 GMT

@pkerr There are still a lot of MO forms that are not ready. The problem should be resolved when the MO forms are finalized.

Tax form availability tool

Re: social security

pkerr — Mon, 27 Jan 2025 20:03:03 GMT

OK... hopefully that will fix it but why would they release the Missouri module if it's not all done?

Re: social security

LeticiaF1 — Tue, 28 Jan 2025 00:56:33 GMT

Some forms get delayed if there are any late law changes or any last-minute updates to the forms. It happens every year, but they release the main forms because not all changes affect all taxpayers.

@pkerr

Re: social security

pkerr — Mon, 03 Feb 2025 13:28:50 GMT

That seemed to be the case. Got the update from Feb 1 and it appears to now be calculating correctly. Though there is a slight change when I enter my S.S. earnings. I would think it should change at all.

Re: social security

AnnetteB6 — Mon, 03 Feb 2025 14:07:00 GMT

Be sure to go through your state return again from the beginning after entering everything on your Federal return. This is to make sure that there is nothing that is missed on the state return after the program was updated.

@pkerr

Re: social security

pkerr — Mon, 03 Feb 2025 15:20:07 GMT

Thank you... but should all that info flow over automatically?

Re: social security

DawnC — Mon, 03 Feb 2025 15:59:05 GMT

Yes, the entries from the federal return transfers to the state return, but if you have already gone through the state return, and then have changes to the federal return, you should go back over any state(s) returns to ensure they reflect those changes/updates. @pkerr