Let us tell the truth. It is not easy to file taxes with the IRS. Usually, you will have to remember things that happened in the past and find supporting documents.
This can take a while if you are not very good at paying attention to details, and you might need the help of a specialized accountant. When talking about tax planning, this feeling of doubt and unease gets worse. A lot of Americans would not have a clear plan, so they would not know what taxes they might have to pay.
One clear example is the tax you have to pay on your Social Security benefits. Based on the money you get every month from the Social Security Administration (SSA), how many of you are sure that you need to file a tax return with the IRS? Like us, you do not know the answer? Keep reading.
How would the IRS define if you need to be taxed?
To answer your question, the IRS says that you will definitely need to pay some taxes. Since 1984, when President Ronald Reagan signed into law changes to the Social Security Act made in 1983, up to 50% of Social Security payments that go over a certain amount are taxed. The idea behind these metrics had to do with how revenue works.
If you work, you would have to pay taxes on some of your annual income. The same must be true for the money you get from the SSA when you retire. It will replace your salary. Later, in 1993, the amount of income that was taxed was raised to 85%.
The IRS says that to see if you are considered to have a filing status over your Social Security checks, you must add up half of your benefits to any other income you would have during the year.
If this amount is more than any of the following amounts, the IRS will tax some of your Social Security benefits. Remember that if you think that making one payment will be too hard on your finances, you can ask the IRS and SSA to take some of your monthly payments off so that your final tax bill is lower at the end of the fiscal year.
| Threshold | Detail |
| $25,000 | · If you are head of a household, single, or a qualifying surviving spouse.
· If you are married buy are filing separately and have lived apart from your spouse for the entire year. |
| $32,000 | If you are married and are filing jointly. |
| $0 | if you are married and plan to file separately but have lived with your spouse at any time during the fiscal year. |
To determine if you need to file a return, you would need to consider your marital status and your income:
| Marital Status and Age | Gross Income Threshold |
| Unmarried senior of 65 years old or older | More than $14,700 |
| Married senior of 65 years old or older filing jointly | More than $28,700 |
| Married seniors but only one of them is under 65 years | More than $27,300 |
To figure out how much of your Social Security benefits might be taxed, you also need to look at your total income, which includes both your Social Security benefits and any other money you make:
| Type of Tax Filler | Income Threshold | Max % of Benefits Taxing |
| Single | $25,000 – $34,000 | 50% |
| Single | more than $34,000 | 85% |
| Joint | $32,000 – $44,000 | 50% |
Is it possible to file your report to the IRS even when you don’t need to?
That is a good habit to have because it helps you know about any changes the IRS may have made to your income tax rules. You might also be able to get different tax credits, some of which can give you money back, like earned income tax credits or child tax credits.
Also See :- Confirmed – the largest increase in Social Security benefits for public sector retirees