Would I have to pay taxes on social security income if I earn 50K from interest plus 25K from Soc Sec per year

Question

This is a hypothetical example. I earn 50k per year from interest and dividends from savings. The only other income is 25K from social security from my wife and I. Total of 75K. Do I include the Soc Sec as income on the tax form?

Answer 1

Yes, a portion of your social security will be taxable.

If you are filing jointly then if your income plus 1/2 of your social security benefits exceeds $32,000 ($25,000 if filing single) then up to 85% of our benefit will be taxable.

There is a worksheet used for this computation in the 1040 instruction booklet. The link to the booklet is below... go to page 28 and print out the worksheet.

http://www.irs.gov/pub/irs-pdf/i1040.pdf

Good luck...

Answer 2

Even if you have no other income, you still have to show soc security on your 1040 (or 1040A). First you enter all of it, then on the next line, the taxable portion. If you earn 50k in interest, 85% of your Soc Sec will be taxable.

Answer 3

Yes you must show it, and a portion of it, probably 85%, will be taxable.