If I have a traditional IRA does Social security have to be taxed

[Spiritofeagles1]

If I have a traditional IRA do I have to pay taxes on my social security benefits?

[xmasbaby0]

The distributions from an IRA are taxable income.  Depending on how much you take from the IRA, your Social Security benefits may become taxable.  You have not mentioned any amounts.

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.

[Bsch4477]

Tax on your social security depends on your total income and is not related to your IRA. 

[Opus 17]

It depends how much you withdraw. Your Social Security benefit may be partly taxable if your total taxable income from all sources (pension, IRA, gambling prizes, investments, etc.) is more than the calculation threshold.  Roth IRA distributions do not affect the taxability of Social Security, because Roth IRA distributions are not taxable income.

[Spiritofeagles1]

So if am understanding you my social security doesn’t get taxed if my income is coming from a Traditional IRA and working correct?

[Spiritofeagles1]

I meant not working

[xmasbaby0]

@Spiritofeagles1 You misunderstood.   Your Social Security CAN be taxable depending on the amounts of other income you are receiving from working and from distributions from your IRA.   Please re-read the information that is in this thread.   We know that it confuses many people.

[Spiritofeagles1]

I didn’t get 2nd part of my last guestion you sent

[Spiritofeagles1]

I’ll try to make my question easier. I am not working. My only income is my distribution from my traditional Ira. My question is does that count against me to pay taxed on my social security?

[Bsch4477]

Previous replies have answered your question. 

[xmasbaby0]

@Spiritofeagles1 Again.....yes, the money you take out of the IRA can make your Social Security taxable.  But it depends on how much you take out of the IRA.   

[Spiritofeagles1]

I take out $33,000 a year

[xmasbaby0]

@Spiritofeagles1 You will receive a 1099R for the money you take out of your IRA.   They send them out in late January/early February.  You have to enter the 1099R into your tax return.  You receive a SSA1099 from Social Security---they mail that to you in January.  You must enter that SSA1099 into your tax return also.  

You have not mentioned your filing status.  Are you filing Single, Married filing Jointly, or Married Filing Separately?   The amount of your Social Security that becomes taxable will be affected by your filing status.   If you file Married Filing Separately, 85% of your SS will automatically be taxable if you have income from your IRA.

When you prepare your tax return you will see how much of your Social Security was taxable on line 6b of your Form 1040.   

[Opus 17]

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@Spiritofeagles1 wrote:

I’ll try to make my question easier. I am not working. My only income is my distribution from my traditional Ira. My question is does that count against me to pay taxed on my social security?

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If your only income is from social security, it is not taxable.  If you have other taxable income from any source, your social security may be taxable, depending on the amount of the other income and your filing status as single, married filing jointly or married filing separately.  Up to 85% of your benefit may be taxable. 

The exact formula is complicated, so I won't go into it here.  You can try using this IRS calculator.

https://www.irs.gov/individuals/tax-withholding-estimator