Your Social Security, and Railroad Retirement Benefits are considered income, and if are found to be taxable income, they must be reported to the IRS.
This page:
• Helps you figure out if your social security benefits are taxable
• Explains how much tax you pay on your social security benefits
• Describes how you should report taxable benefits to the IRS
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Reporting your social security benefits to the IRS
Your Social Security, and Railroad Retirement Benefits are considered income, and if are found to be taxable income, they must be reported to the IRS.
However, not all of your social security benefits are taxable. This depends on your filing status, your total social security benefits, and other taxable income.
Your total social security benefits for 2011 are usually reported to you in January, when you receive Form SSA-1099 for Social Security benefits, and Form RRB-1099 for Railroad Retirement benefits
Social Security Tax Limits for 2011
The IRS uses a base amount, depending on your filing status, to figure out the amount of social security benefits that are taxable income for you. Your base amount is:
• $25,000 if you are single, head of household, or a widow(er)
• $25,000 if you are married, filing separately, and lived apart from your spouse for all of 2011
• $32,000 if you are married filing jointly
• $0 if you are married filing separately, and you lived with your spouse at any time during 2011
Given the above base amount for your filing status, take one half of your total social security benefits, plus the total of all your other income, including tax-exempt interest, and compare it to your base amount. If the number you come up with is higher than your base amount, some of your social security benefits may be taxable income.
Sidebar Figuring out your taxable social security benefits is easy when you use an online tax filing program. You can e-file with H&R Block where you can also get help from tax professionals, should you need it. The system allows you to work on your return for free, until you actually decide to file.
How much tax will you pay on your social security benefits?
Generally, up to 50% of your social security benefits is taxable income. However, up to 85% of your social security benefits can be taxable income if either of the following situations applies to you:
• The total of one-half of your social security benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly).
• You are married filing separately and lived with your spouse at any time during 2011.
Reporting your social security benefits
If none of your social security benefits are taxable income, do not report them to the IRS, unless you are married filing separately and you lived apart from your spouse for all of 2011.
When reporting Social Security benefits and Railroad Retirement benefits, you must use either Form 1040, or Form 1040a. You cannot use Form 1040EZ.
When using Form 1040a, report your net social security benefits on line 14a, and your taxable social security benefits on line 14b.
When using Form 1040, report your net social security benefits on line 20a, and your taxable social security benefits on line 20b.
Get more help with reporting social security benefits
In its Premier version, H&R Block includes additional help to aid you in sorting out the sometimes complicated issues that arise when reporting various retirement benefits. Here's a sampling of all the additional help inluded:
• Early Retirement Forecaster shows you when you can safely retire.
• Retirement Tax Advisor gives smart advice for insurance, gifts, inheritance and more.
• Life Events Planner helps you determine the tax impact of retiring within the next year.
• Social Security Trade-Off Calculator shows how income changes affect your social security taxes.
• Added Support for Medical Issues provides tips on disability benefits, life insurance and more.
• Distribution Calculator shows how much you are required to withdraw after age 70 1/2.
• Medical Expense Expert provides guidance on which expenses are deductible.
• Retirement Age Analyzer compares retiring at 62 vs. full retirement age.
• Guidance for Veterans helps you take advantage of retirement benefits set up just for veterans.
Get started, and work on your return, for absolutely free. Begin here.
Related IRS publications
You can get more information about reporting Social Security Benefits and Railroad Retirement benefits directly from the IRS in the form of Publication 915.
Note: you will need an Adobe Acrobat Reader to view these publications, which you can get here. (But you probably already have it.)
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