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Barbara, Enrolled Agent
Category: Social Security
Satisfied Customers: 3360
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I am 71 and will be 72, 12/17/2016. Am working full time. I

Customer Question

I am 71 and will be 72, 12/17/2016. Am working full time. I have been paying a penalty for the past 6 years for making over the "limit." Is there an age at which I cease to be responsbile for this penalty?
Submitted: 11 months ago.
Category: Social Security
Expert:  Barbara replied 11 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Unfortunately, there is no age limit. Rather, it is a dollar limit.

Per SSA,

"Some people who get Social Security must pay federal income taxes on their benefits. But, no one pays taxes on more than 85 percent of their Social Security benefits.

You must pay taxes on your benefits if you file a federal tax return as an “individual” and your “combined income” exceeds $25,000. If you file a joint return, you must pay taxes if you and your spouse have “combined income” of more than $32,000. If you are married and file a separate return, you probably will have to pay taxes on your benefits."

In other words, you are not paying a penalty, but part of your SS benefits become taxable income.

If you look at Line 20a and Line 20b of your tax return (Form 1040), you will see the total amount of your benefits on Line 20a and the taxable portion on Line 20b.

Please let me know if I can assist you further.

Thank you and best regards,