Social Security is the most discussed topic in the present days, as the United States approaches its Tax Returns 2019. The reforms in the tax laws have given hope to the tax payers that this will help them so as to pay less in tax for the year while filing Tax Return 2019.
The retirees who are relying on the Social Security use it as a mode to save their savings.
The retirees particularly use Social Security as a supplement to their savings along with providing with a regular source of income. These people are looking for any breaks in the tax, while filing Tax Return 2019 which they can avail to so as to increase the savings.
Things to keep in mind while filing Tax Return 2019
But there is one thing that the taxpayers need to keep in mind while filing for the Tax Returns 2019. While filing the Tax Returns 2019 they need to know the benefits that they can avail.
The benefits of the taxation of Social Security though have been on the books but cannot be availed always or to the fullest.
As per the law not everyone can put their social security on their respective Tax Returns 2019.
There is instead an income tax which determines that whether one will end up having a portion of their income as taxable income.
It also determines that what will be the portion that can be included for the benefits as the taxable income.
The rules that govern the amount that will b included as Social Security includes adjusted gross income from sources that are other than Social security.
It will also include non-taxable interest from the municipal bonds as well as half of what one will get from the Social Security.
How to calculate Social Security in Tax Return
|FILING STATUS||50% TAXATION THRESHOLD||85% TAXATION THRESHOLD|
|Single, Head of Household, Qualifying Widow(er)||$25,000||$34,000|
|Married Filing Jointly||$32,000||$44,000|
Now, so as to calculate, assume that your income is above the 50 percent column then you have to consider only that amount which is above that threshold.
Suppose you earn $25,200, then only $200 will be treated for calculation of Social Security. Now, 50 percent of this amount will be treated as taxable income.
If the income is above 85 percent column, then the taxable portion rises to 85 percent.