Can you upload a copy of this letter, AFTER blackening out your private info, by chance? I ask this because your figure still seems wrong. And to repeat, you indicated that the LETER you received, told you that IF your income exceeded 132k, you could be taxed on your SS. The letter specifically gives you the 132k figure. That is what doesn't make sense because 132k is NOT the limit:
Here is how the SSA explains when your SS benefits will be taxed:
"Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
No one pays federal income tax on more than 85 percent of his or her 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.
Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your "combined income"
Each January you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax."
So you see, I am not seeing where the $132k is coming from, since the threshold for taxation is WAY lower, unfortunately. But aside from that, if your pension income is included in your adjusted gross income, then it will be part of your combined income, and may push you into a taxable range (for the SS portion). And if that combined income exceeds merely 44k, then some of your SS will be taxed, yes.
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