Solved
Huge tax increase
After entering my W-2 and my wife's Pension 1099-R when I entered her SSA-1099 the taxes due increase a lot. What is going on?
Up to 85% of your wife's Social Security (SS) benefits may be taxable depending on what other income you have. If your wife does not have income taxes withheld from her SS benefits, that would increase your tax liability at year end. Preview your 1040 to see what your wife's taxable SS income is.
The key figure is the Modified Adjusted Gross Income (MAGI). The MAGI includes half of your Social Security, plus other sources of income. Once your MAGI exceeds the base amount for your filing status ($32,000 for Married Filing Jointly) at least part of your Social Security income becomes taxable. The taxable portion of your Social Security income increases once you reach additional MAGI thresholds.
To determine if your Social Security income is taxable, all you need to do is enter that income. TurboTax does the rest!
At the state level, many states exempt Social Security from taxation, either partially or completely. Again, if your sole income is from Social Security, it's likely you don't need to file a state return either.
TurboTax will automatically figure out whether you need to pay federal and/or state taxes on your Social Security income. Just enter your SSA-1099 information in TurboTax and we’ll let you know!
Related Information:
- Where do I enter an SSA-1099, SSA-1099-SM, or SSA-1099-R-OP1?
- Do I need to file a federal return this year?
- What is a lump-sum Social Security payment?
- Do I need to report the $255 death benefit from Social Security?
- Do I need to report my Supplemental Security Income (SSI)?
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