Is the 1040 tax booklet aimed toward taxpayers living in community property states but HOPE we won't notice???

Question

we earned our pensions while working and residing in a non-community property state Ill. Husband on social security but I am not. taxes were paid on his wages before he retired. For 2 months now the IRS has been trying to convince me to believe that by calculating my annuity with his S.S.to determine how much it will be taxable is NOT DOUBLE TAXING!.... besides insulting me by saying my annuity is income to my husband, they had the nerve to say I can't exclude one-half of my benefit as he does.After using my item to help insure that his S.S. will be TAXABLE,they expect me to return my aunnity back to line 16b to be taxed along with an additional $9000.....[taxable S.S. as a result of using me to rip my husband off] Who is that S.S. worksheet designed for..?. I believe it is for all my husbands' additional pension wages..etc to be calculated not mine.According to tax publication 555 we live in a Non-Community property state. Do these laws count?IRS won't give a clear answer.JUST PAY !

Answer 1

For a married couple filing a joint return, the total of all of their income is used to determine whether any of the social security benefits (for either or both people) are taxable. To determine the amount taxable, you start with 1/2 of the social security benefits plus all of your other joint income - you can't exclude half of your annuity from the calculation because it isn't social security - you said you don't receive that - and that's the only income that's excluded from the calculation. It has nothing to do with whether you are in a community property state or not.

You have the option of filing separately, then your income wouldn't be considered in calculating how much of his social security would be taxed. But if you do that, the amount excluded on the worksheet for him would be zero, not $32K that is excluded for married filing jointly, so you'd very possibly come out worse in total.

They aren't saying that he has the right to half of your annuity, just that on a joint return, all income and deductions are considered to be for the couple together. Your understanding as outlined in your question above just isn't correct - and you aren't being ripped off, unless you consider taxing of social security in itself to be a ripoff - that's a different question.

Look at page 76 and 77 of IRS Publication 17 (download at irs.gov) for details on calculating the portion of social security that's taxable. It's pretty specific about joint returns, and separate returns.

Answer 2

Any part of a spouse's Social Security benefits that are taxed does not depend on whether you live in a community property state, or whether your pension(s) were accumulated while working in a community property state.

A married couple may have some of their Social Security benefits taxed. The amount that is taxed depends on the joint income of the couple, (whether their state of residence considers it community or separate income doesn't matter), plus the amount of SS benefits.

Generally, the formula is income +(1/2)SS benefits. Your spouse's benefits begin to be taxed when this amount is more than $32,000. If the formula amount is more than $44K, then 85% of SS benefits are taxed.

You are correct in that SS taxes are paid on an after-tax basis, and that for some taxpayers, SS benefits are again taxed.

This is all explained in IRS Pub 17, which includes a worksheet to determine how much of the SS benefits are taxed.

Your pensions are taxable income, except for any contributions you made to your pension on an after-tax basis. This will be shown on your 1099R. Other than that, there is no federal exclusion for pensions.

Answer 3

I realize that your probably not going to agree with me, since what I have read above. But I am only stating my opinion on your question and that is all. I am not criticizing you in any way just voicing my opinion and that is all, since I don't not choose to judge any one. I think that you should pay the same taxes. My reasons are as follows, how are they going to sift through who is and who isn't gay. That would never work, since they would have all kinds of people saying that they are gay, just to be able to get that. People who are gay often have married and they have children, and they get the same credits as any other married person in this country. So, I'm sorry I don't agree with what you are saying. You have the same right to get married to the opposite sex and even have children if you want. Some gays have done this, they have lied to the people that they married. But they do now have children, and they do get the same tax credit as any one else who has children. You are equal under the law, you choose to be with persons of the same sex which no one is forcing you to do. It is no different for a person who chooses to remain single, they don't have the same benefits as married people do either. Also there have been and are gays in the military, I know of some who are gay and have been in the military. And yes they did their entire stint in it, with an honorable discharge too. So your statement is false, when you say that gay persons can not serve their country. Every one makes choices for them self. Just as I am choosing to remain single and I don't have the same benefits as a people that are married do. I have to live with that too and that is the way it is. So that I can not complain either. Every one has the same rights it just depends on how your looking at it. Every one makes their own choices, as each person should do.

Answer 4

your rigth The IRS are lying to you . you are not required to file -you are not a corporation or have foreigh earned income . see www.givemeliberty.org