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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I am now 66 years old, just started on social ...

Resolved Question:

I am now 66 years old, just started on social security. Have a part time job.   my income will be approximately $17,500 for this year. Do I have to pay income tax?   I have filed jointly with my husband for years but he is one year younger than me and still works full time making approx. $250,000 per year.   Should I file a separate return??
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.

HelloCustomer

How much are your social security benefits each month? I need that figure in order to determine how much of your benefits might be taxable.

Customer: replied 8 years ago.
$819.00 per month and I just started in May of this year
Expert:  Merlo replied 8 years ago.

Hello againCustomer

Based on the income that you and your husband still have in addition to the social security benefits that you are receiving, 85% of your total social security benefits will be taxable. This will be the case whether or not you file a joint return or separate return.

When you are married and receiving social security benefits, if you decide to file a separate return, you lose the benefit of the exemption amount given on social security earnings, so 85% of your benefits would still end up being taxable. So unfortunately it will not benefit you to file a separate return. I am giving you a link below to the social security worksheet that you would use to determine how much of your benefits are taxable. You can fill in the worksheet based on filing a joint return or a separate return, and you will see that the results come out the same in the end. Sorry I couldn't give you better news.

If this has been helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.

http://www.completetax.com/taxguide/tools/downloads/07-ssbenefits(1040).pdf

 

Customer: replied 8 years ago.
are you sure about it being 85%   I thought it was 50% only?
Expert:  Merlo replied 8 years ago.

Hello againCustomer

Unfortunately the correct figure is 85%. That is the maximum percentage of your SS benefits that can be taxable, and due to the high income bracket because of your husband's salary, you will be taxed at the maximum percentage.

I think maybe the 50% that you were thinking about is part of the formula that is used in determining benefits. Basically that formula is your taxable income plus 50% of your SS earnings - and if that total exceeds the exemption amount, then a portion of your benefits are taxable. You will see on the worksheet that I sent you a link to that 85% is the correct figure.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.

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