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I just got a letter for Social Security telling me they are…

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I just got a...

I just got a letter for Social Security telling me they are changing me from disability to retirement income. Do I have to pay taxes on my retirement income that I paid from my paychecks every year?

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If I don't have taxes taken out up front from my retirement benefits will I have to pay upon ta x time? I know this money I am getting now is the money that came out of every check that I made since I started working at 18.

Submitted: 10 months ago.Category: Tax
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Answered in 1 minute by:
10/6/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 10 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,901
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

HI, MY NAME’S LANE - I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice 1986.

...

If you’ll please bear with me for a minute I’ll type up my initial response, and then we can go from there if you have further questions on this.

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 10 months ago

No, (meaning, taxation for social security retirement work exactly the same as tax on social security (even dependent's benefits). It all comes under the same IRS ruling, which you can find in IRS publication 915.

...

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. 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.
    • more than $34,000, up to 85 percent of your benefits may be taxable.

  • file a joint return, and you and your spouse have a combined income* that is
    • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
    • more than $44,000, up to 85 percent of your benefits may be taxable.

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 10 months ago

e\If Social Security is your ONLY income? You won't be taxed. You'd never get over that limit where combined income is 25000. WHY ... becasue "combined income" actually means 1/2 of Social Security income plus certain other income.

...

So if Social Security were your ONLY income it would have to be $50,000 before any of it would be taxed (more than that for a couple)

...

*Note:

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

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 10 months ago

But again, the fact that the benefit is "becoming" a retirement benefit changes not (not the amount, nor the potential taxation of it). It's just paid from a different fund.

...

Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

I hope that you’ll rate me based on my accuracy and thoroughness, rather than any good news/bad news content.

That’s the only way JustAnswer.com will compensate me for the work here.

Thanks,

Lane

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