By Deborah Ritz
I retired last year, and started receiving social security payments. Do I have to pay taxes on my social security benefits?
Social security benefits include monthly retirement, survivor, and disability benefits.
They do not include supplemental security income (SSI) payments, which are not taxable.
The amount of social security benefits that must be included on your income tax return and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year.
To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of one-half of your benefits and all of your other income, including tax-exempt interest.
The base amount for your filing status is $25,000 if you are single, head of household, or qualifying widow(er); $25,000 if you are married filing separately and lived apart from your spouse for the entire year; $32,000 if you are married filing jointly; $0 if you are married filing separately and live with your spouse at any time during the tax year.
If you are married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits.
Even if your spouse did not receive any benefits, you must add your spouse’s income to yours when figuring if any of your benefits are taxable, if you file a joint return.
The IRS provides a worksheet to help you determine the amount if any that is taxable in the instruction booklet for Forms 1040 and 1040A. Download a copy at: IRS.gov/instructions/i1040/index.HTML.
Information is also available in Publication 915, Social Security and Equivalent Railroad Retirement Benefits.
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FYI: Filing Deadlines
In order to meet the filing deadline for tax year 2014, income tax returns must be properly transmitted and acknowledged or addressed, mailed and postmarked by 4/15/15.
Returns calculated with refunds can be filed up to three years after the official filing date of the return in question.
Using that information the final date a taxpayer can file for a refund for tax year 2011 is also 4/15/15.
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Are you losing your opportunity to receive the 2011 Earned Income Tax Credit?
If you did not file taxes because your income level does not require you to file, the IRS might owe you a refund.
This is because an Earned Income Tax Credit (EITC) has been awarded to low wage earners in recent years.
If you qualify, the credit could easily outweigh your tax obligation.
For 2014, the credit is worth as much as $5,751.
The EITC helps individuals and families whose incomes are below certain thresholds.
More EITC information is available on line at: http://www.irs.gov/
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Questions for Deborah Ritz can be e-mailed to The Weekly Adirondack at WeeklyADK@yahoo.com