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jgl2
Level 1

pension & social security

My only income is social security and distributions I take from my 401 pension.  I know the distributions are taxable, but I don't understand why that causes a portion of my social security benefits to then be taxable. 

1 Best answer

Accepted Solutions
xmasbaby0
Level 15

pension & social security

 

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 2017 that limit was $16,920 —for 2018 it will be $17,040—for 2019 it will be $17,640— for 2020 it will be $18,240)  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.

 

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2020 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 13 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.  These states offer varying degrees of income exemptions, but four mirror the federal tax schedule: MN, ND,VT, and WV

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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5 Replies
VolvoGirl
Level 15

pension & social security

Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:
Married Filing Jointly: $32,000
Single or head of household: $25,000
Married Filing Separately: 0

 

To see the Social Security Benefits Calculation Worksheet in Turbo Tax Online version you would have to save your return with all the worksheets to your computer. Or if you are using the Desktop CD/Download Software you can switch to Forms Mode (click Forms in the upper right) and click on SS in the list on the left side.
https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

xmasbaby0
Level 15

pension & social security

 

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 2017 that limit was $16,920 —for 2018 it will be $17,040—for 2019 it will be $17,640— for 2020 it will be $18,240)  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.

 

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2020 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 13 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.  These states offer varying degrees of income exemptions, but four mirror the federal tax schedule: MN, ND,VT, and WV

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
19610
New Member

pension & social security

I don't have to pay on my socialsecurity but I don't know how to fill in the information required on Turbo Tax.  Do I just skip it?

ErnieS0
Expert Alumni

pension & social security

You should enter the information from your SSA-1099. TurboTax will double-check to make sure it is not taxable.

  • Type ssa-1099 in Search in the upper right
  • Select Jump to ssa-1099
  • Say YES to Did you receive Social Security or Railroad Retirement benefits in 2020?
  • Check the box Social Security benefits
  • Enter your information as it appears on your Form SSA-1099. TurboTax will carry your Medicare information to medical expenses
VolvoGirl
Level 15

pension & social security

@19610   Do you get Social Security or ssi?  Did you get a SSA-1099?  If you get Social Security it might be taxable.

 

Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

 

Enter a SSA-1099, SSA-1099-SM or RRB-1099  under

Federal Taxes on the left side or top

Wages and Income

Then scroll down to Retirement Plans and Social Security

Then the second line - Social Security (SSA-1099. RRB-1099) - click the Start or Revisit  button

 

You might be confusing the taxable part with the reduction in benefits.  There are 2 different things to know about social security. People get them mixed up all the time.

 

1. Your actual SS checks

If you are over full retirement age your actual ss checks won't be reduced. Otherwise they will actually reduce your payments if you make too much other income in the prior year.  See SS FAQ for working after retirement

https://www.ssa.gov/planners/retire/whileworking.html

 

2. Income Tax

For any age up to 85% of Social Security becomes taxable when ALL your other income plus 1/2 your social security reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

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