Why is our taxable SS so low?
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Why is our taxable SS so low?

Why is only $559 out of $35880 Social Security taxable?
2 Replies
Level 15

Why is our taxable SS so low?

We do not have any other details about your income so we do not know.  But you are posting from TurboTax Live.


You can arrange for the Live help you are paying the extra fee for with your questions from  5 a.m. to 5 p.m. Pacific time





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 is $16,920 —for 2018 it will be $17,040—for 2019 it will be $17,640)  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 5a and 5b of your Form 1040




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.**
Level 15

Why is our taxable SS so low?

Social security only becomes taxable when added to sufficient other income. If you are otherwise required to file a tax return, you do need to enter it in Turbotax (TT). TT will determine the taxable portion.

Social security (including SSDI) becomes taxable when your income, including 1/2 your social security, reaches $32,000 (Married Filing Jointly(MFJ)).


For the first  $12,000, after that,  only 50% of your SS is taxed. After that 85% is taxed. And gradually the  50% taxed  is replaced with the 85%. It's the government; they make it complicated. See IRS Publication 915. When TT prints out your return, it will provide you with the  IRS social security worksheet showing you how the taxable amount was calculated.  Here’s a blank copy showing you how the calculation is done:



 After TurboTax (TT) calculates the taxable portion of SS, it puts the total amount of SS on line 5a of form 1040 and the taxable amount on line 5b 

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