Hello again ridgeville,

When you receive SS benefits, you are only allowed to have a certain amount of other income before part of your SS benefits may become subject to tax. There is an actual worksheet that needs to be filled out to determine the exact amount of your benefits that might be taxable.

But the way it works is this. When you are married, SS allows you a base amount of $32,000. You would take half of your total SS earnings, which in your case is $23,000, and subtract that from the base amount of $32,000. The difference (in your case $9,000) is what you are allowed to have in income from other sources before part of your SS benefits are also subject to tax.

The maximum amount of your SS benefits which could be taxable is 85%.

You would need to add up your earnings from the job you had earlier this year, your unemployment benefits plus any other income you may have such as interest or dividends. If that total amount exceeds the $9,000 you are allowed by SS, then some of your SS benefits will be taxable.

I am giving you a link below to a calculator where all you need to do is enter your total SS earnings in box #1, your total other income in box #2 and in box #3 any tax exempt interest you earned. The calculator will then tell you how much of your benefits will be subject to tax this year.

http://www.mgcpa.com/calculators/y2004/socsec.html

If this was helpful please press the Accept button.

Thank you ridgeville and let me know if you have more questions.

Expert:	Merlo
Pos. Feedback:	99.8 %
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Answered:	10/6/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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