(MENAFNEditorial)
Those who receive Social Security income may be required to pay taxes on part of their benefits though there are some who discover their benefits aren’t subject to federal tax. If a taxpayer received Social Security how can they tell if their benefits are taxable? The following facts can shed a little light on how someone’s taxes relate to Social Security income.
Anyone who received benefits through the tax year 2014 should receive a Form SSA-1099 Social Security Benefit Statement showing the total amount they received. If the taxpayer’s total annual income was completely from Social Security benefits they may not be subject to taxes and they may not be required to file a return at all. However if they receive income from sources other than Social Security they will likely be required to pay tax on some portion of their benefits. Whether or not someone pays taxes is contingent upon their total income and which status they use to file their return.
Taxable Equation:
A simple equation is all it takes to determine if someone’s benefits are taxable. A taxpayer should add half of the amount they receive in Social Security to the total of any additional income they earned including interest which is exempt from taxes. “They should compare the sum of their income to the predetermined base amounts which are related to filing status.” explained Paul Stanley of eTax.com. “If the total is greater than the base amount their benefits are likely to be taxed.” The base amounts are:
$25000 – Single Head of Household Qualifying Widow(er) or Married Filing Separately provided you haven’t lived with your spouse during the year.
$32000 – Married Filing Jointly
$0 – Married Filing Separately if you’ve lived together at any point during the year.
About eTax.com
eTax.com was founded with the goal of helping people prepare and file their tax return quickly easily and affordably. Since then eTax.com has grown to become one of the most popular online tax preparation services.
For more information about eTax.com visit http://www.etax.com
Contact:
Paul Stanley
eTax.com
855-275-3829
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