Hello. My specialty is focusing on YOUR Financial needs. Financial Planner/Business Owner for 20 years. CPA,PFS,QFP,GMMA.
That depends on your filing status.
What they are doing seems very wrong.
First you would have to earn so little that SS is not taxable.
A quick way to find out if any of your benefits may be taxable is to add one-half of your Social Security benefits to all your other income, including any tax-exempt interest.
Next, compare this total to the base amounts below.
If your total is more than the base amount for your filing status, then some of your benefits may be taxable.
The three base amounts are:
•$25,000 - for single, head of household, qualifying widow or widower with a dependent child or married individuals filing separately who did not live with their spouse
at any time during the year
•$32,000 - for married couples filing jointly
•$0 - for married persons filing separately who lived together at any time during the year
If they are married and making more than 32,000 then the SS is taxable as well as their other earnings!!!
Even then, if SS was not taxable there is still federal tax on the "other income". Again your filing status determines the tax rates because they increase as earnings increase.
If you'll tell me you filing status, and tell me if you itemize, I'll give you an exact number of dollars you can earn in order to pay zero taxes.