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New Member
posted Mar 18, 2024 4:11:22 PM

How I can lower my federal due

Why is m y federal tax due high this year. I m 68 year i receiving SSA1099 and work part time1099  . Total income is from  W2 and adding SSA 1099. Is this correct should be only income from W part time work

0 2 694
2 Replies
Level 15
Mar 18, 2024 4:13:59 PM

If you have a net profit from the self-employment income then you will owe Self-Employment taxes.  Those taxes are not federal income taxes.  They are the employer and employee portions of Social Security and Medicare taxes owed for the self-employment income.

Level 15
Mar 18, 2024 4:14:49 PM

ALL of your 2023 income goes on your 2023 tax return.  In one part of your post you mention a W-2 but then you also mention a "1099"---did you have some self-employment income that is on a 1099NEC?   When you have Social Security benefits combined with other sources of income, your SS can become taxable.     

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