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retirementlawyer
retirementlawyer, Tax Attorney
Category: Social Security
Satisfied Customers: 15685
Experience:  13 years experience in social security
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I was born March 7, 1948. I plan to take my social security

Resolved Question:

I was born March 7, 1948. I plan to take my social security benefits at age 66, my full retirement age. Is there a limit on my income at that time?
Submitted: 2 years ago.
Category: Social Security
Expert:  retirementlawyer replied 2 years ago.

retirementlawyer :

If your full retirement age is 66, their is no earnings penalty, so you can make as much as you want after your full retirement age, and it will not reduce your social security at all.

retirementlawyer :

A beneficiary under the full retirement age:




  • Can earn $14,640 a year and not lose any benefits in 2012.



  • We will deduct $1 in benefits for every $2 earned above $14,640.



A beneficiary reaching full retirement age:




  • Can earn $38,880 a year and not lose any benefits in 2012.



  • We will deduct $1 for every $3 earned above $38,880.


retirementlawyer :

The law is stated above, the only complication you may have is that in the first year you apply for benefits, the penalty will be less if you take retirement before the time you reach age 66.


 

Customer:

I did not ask about before I turn age 66

retirementlawyer :

If you wait till the month you turn 66, then the first year rule would not apply, and you can make as much as you can after you reach age 66, however, you may owe Federal taxes if your income is high.


 

retirementlawyer :

As I have stated if you wait till age 66, you would not have any earnings penalty.

retirementlawyer :

Their is no limit after age 66.


 

retirementlawyer :

If you received income from other sources, your benefits will not be taxed
unless your modified adjusted gross income is more than the base amount for your
filing status.


 

retirementlawyer :

The 2010 base amounts are:
• $32,000 for married couples filing jointly.

$25,000 for single, head of household, qualifying widow/widower with a dependent
child, or married individuals filing separately who did not live with their
spouses at any time during the year.
• $0 for married persons filing
separately who lived together during the year


 

Customer:

And are benefits subject to federal and state income tax when I starting drawing at age 66?

retirementlawyer :

Social security is not subject to taxes, unless you have other income, and if the other income is over the above base amounts, your social security would be taxed.

Customer:

OK thanks.

retirementlawyer :

If you have any further questions please do not hesitate to ask.


 

retirementlawyer :

If satisfied please provide us with positive feedback, so we can receive credit.


 

Customer:

One more thing, would benefits be taxed at same amount as income tax?

retirementlawyer :

Social security is taxed different under the rules, up to half of your benefits will be taxed if you exceed the base amounts. However, up to 85 percent of your benefits could be taxed if you are a single filer and the total of all your other income plus half of your Social Security checks exceeds $34,000, or $44,000 if you are married and file jointly.




retirementlawyer :
retirementlawyer :

The tax rates on social security benefits are as follows and based on your total income. In fact, the table below shows the social security tax rates based on your modified adjusted gross income (MAGI) which we explain next.

























Percent of social security income taxedSingle, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the year,Married people
0%Less than $25,000Less than $34,000
Up to 50%$25,001-$34,000$34,001 to $44,000
Up to 85%More than $34,000More than $44,000

 


Notice that for people with lower income (e.g. single with modified adjusted gross income below $25,000), social security income is tax free. However, no amount of social security income is tax free if you are married filing separately and lived with your spouse at any time during the tax year.

Customer:

Thanks, XXXXX XXXXX good day

retirementlawyer :

Thank you, XXXXX XXXXX you have any further questions please do not hesitate to ask, and please provide us with positive feedback so we can receive credit.


 

retirementlawyer, Tax Attorney
Category: Social Security
Satisfied Customers: 15685
Experience: 13 years experience in social security
retirementlawyer and other Social Security Specialists are ready to help you

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