Taxable Social Security Income

[fasteddie577]

Hi, I took my social security at the age of 62. My only other income is my retirement income from my employer. I've had to pay income taxes on a portion of my social security income (SSI) every year since I started receiving  SSI. My full retirement age is 66 1/2. I am currently 65. When I reach full retirement age will the tax rate on my social security income become lower? Thanks

[SteamTrain · Accepted solution]

Nope, it won't be lower.

But once you reach age 65, your Std Deduction increases.

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When you start taking SS early, the SS admin can reduce your SS payments if you continue to actually work, and your working income is over a certain $$ amount....that's an entirely different process from the % of SS that is actually taxed at tax time.  But for details on that, you'd have to check the SS website (unless someone with the exact details pipes in here) .  But if you didn't work a paying job since starting SS, it wouldn't apply to you.

[fasteddie577]

Thank you very much for the information. Have a great rest of your day.

[sshubilla]

Thanks.  I understood that 85% of my and my wife's social security are taxable.  Is that correct?  

[MayaD]

Yes. You will pay tax on only 85% of your Social Security benefits, based on Internal Revenue Service (IRS) rules. If you:

• file a federal tax return as an "individual" and your combined income* is
  • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $34,000, up to 85 percent of your benefits may be taxable.
• file a joint return, and you and your spouse have a combined income* that is
  • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $44,000, up to 85 percent of your benefits may be taxable.
• are married and file a separate tax return, you probably will pay taxes on your benefits.

Social Security 

IRS.gov

[Csuftax2]

Where in turbotax can I see the calculation used to determine the taxable amount  of social security income? I have used IRS p15 W1 to do the calculation and need to validate the turbotax calculation.  turbotax made 100% of our joint SS income taxable. A competing product showed the taxable SS income as 85% of the total SS income. 

[SteamTrain]

@Csuftax2 

See the complete discussion here....to get a PDF to include the Social Security Benefits worksheet, see the link below:

(the Discussion is for the "Online" software...but if you are using the Desktop software, that worksheet can be seen more directly in Forms Mode)

Solved: Re: Turbotax social security taxable amount incorrect? (intuit.com)

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[Csuftax2]

Thanks, that discussion got me to the Print center and the taxable amount value. TurboTax was correct.