How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask lev-tax Your Own Question
lev-tax
lev-tax, Tax Advisor
Category: Social Security
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Social Security Question Here...
lev-tax is online now
A new question is answered every 9 seconds

I'm 67, divorced and will begin drawing SS benefits during

Customer Question

I'm 67, divorced and will begin drawing SS benefits during 2015. I would like to do some limited consulting but want to know how it will impact my SS benefits from a tax standpoint. What will my taxes be if I earn $25,000 a year as a consultant and collect $2,700 a month in SS benefits ($32,400 for the year)? What would my taxes be if I don't work?
Submitted: 11 months ago.
Category: Social Security
Expert:  LawTalk replied 11 months ago.

Good afternoon,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. In order to give you a clear and concise answer, I will need some additional information about the circumstances, please.

1. Are you single or married?

Doug

Customer: replied 11 months ago.
not married, no mortgage, standard deductions (not enough to itemize)
Expert:  LawTalk replied 11 months ago.

Thanks for the information,

I thought I'd lost you after almost a day.

You can do the following quick computation to determine whether some of your benefits may be taxable:
A. First, add one-half of the total Social Security benefits you received to all your other income, including any tax exempt interest and other exclusions from income.
B. Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

If you are single, your base amount is $25,000.

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. If it is more than $34,000, up to 85 percent of your benefits may be taxable.

Your adjusted gross income + Nontaxable interest + ½ of your Social Security benefits = Your "combined income".

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

Please be so kind as to rate my service to you. That is the only way I am credited for assisting you.

I wish you and yours the best in 2016,

Doug

Expert:  LawTalk replied 11 months ago.

Good afternoon,

Do you have any additional questions that you would like me to address for you? If I have provided you with the information you were seeking, would you please now rate my service to you?

Please keep in mind that, even though you have already paid your deposit money over to JustAnswer, until you rate me highly for my service, I will not be paid for having assisted you with your questions.

Thanks in advance,

Doug

Customer: replied 11 months ago.
THIS IS NOT A RATING. My question was not answered. The info in the reply is right off the SS website-I had already viewed this info. Please go back to my message and provide me with the info I requested. How much tax do I owe in both of my scenarios. I'm looking for $$. It seems this needs to go to a tax vs a legal expert. DO NOT CHARGE MY ACCOUNT until my question is answered as asked. I'm copying this message and will protest the $27 charge on my American Express card (agreed to the $5 deposit) if my question is not adequately answered. Thank you. Suzi R
Expert:  LawTalk replied 11 months ago.

Hi,

You have not been charged for the answer and may ask for a refund at any time. Had I known that you expected me to actually run your taxes for you I never would have tried to answer your question. To actually give you the answer I would literally have to run your numbers through tax software as if I were doing your tax return. Your question is more suitable for our tax category and not social security, and I will opt out and ask that the question category be switched. However, I have doubts that anyone will agree to do two separate practice tax returns for you.

I am unable to further assist you in this matter, and I am going to opt out of your question and open this up for other professionals.

Your question is being placed back in the question list for other professionals to see, and to respond to. You do not have to stay online for the question to be active. Should another professional pick it up, you should be alerted by email unless you actively disable this feature.

There is no need for you to reply at this time as this may "lock" your question back to me, thus inadvertently delaying other professionals' access to it.

I apologize for any inconvenience and wish you well in your future.

Doug

Expert:  lev-tax replied 11 months ago.

Hi
Please let me address your question.
I assume that as a consultant - you are NOT an employee - but a self-employed contractor with compensation reported on 1099MISC form.
If you are an employee - please let me know.

Your compensation will be subject of both self-employment and income taxes - so I assume that is NET self-employment income (after all qualified deductions)
As you already know - a part of your social security benefits will be taxable

Your total benefits $2,700 * 12 = $32400.
.

So far - your
Adjusted Gross Income (AGI) $32,352
Standard Deduction (included additional for being above 65) $7,850
Personal Exemptions: $4,000
Taxable Income $20,502

Regular Tax: $2,614
Self-Employment Tax: $3,532
Total estimated tax liability - $6,146
minus any withholding or estimated taxes you paid (if any)

Does that answer your question?