Social Security Questions? Ask a Social Security Expert
Hi. My name is ***** ***** I will be happy to help you.
Are you asking if the capital gains will reduce your benefits or are you asking if the capital gains will make your benefits taxable?
Ok. Those are two separate issue.
Capital gains will not reduce your benefits. Only earned income like job or self-employment can reduce your early benefits if you took your benefits before your full retirement age. Capital gains is unearned income. Your benefits will not be reduced.
Depending on amount of capital gains and your other income, up to 85% of your benefits could be taxable. Even if your capital gains will be taxed at 0% tax rate, it can still affect your benefits because capital gains will still be included in your total income.
How much of capital gains do you have and what's your other income and filing status?
Ok. So you have 20,400 in social security income, 3600 in retirement income and 59K in capital gains. What's your filing status?
Also, are we talking about short term or long term capital gains?
Because of the capital gains, 85% of your benefits will be taxable. If your husband passed away in April you will still be able to file married filing jointly. Is his income included?
Short term capital gains are taxed as ordinary income, so you will be looking at about $8000 in tax liability.
If you gift more than 14K to any of your children, you will also have to file gift tax return. Unless you already gifted 5.43M during your lifetime, there will be not gift tax but a return will still be required.
I see you read my respond. Do you have any questions? Is there anything else I can help you with today?