Reply
Newbie

Social security taxes after 70 1/2.

why do marry couples pay more in social security taxes on there income?My wife should be tax a 25 thosand and me 25   thosand.

0 Kudos
2,346 Views
10
Report
Regular Contributor

I beleive some of this confusion is because of the age requirement of tax law prior to the tax act of 2017.  For 2018 and beyond your tax base amount is what is important to know.  A married couple filing a joint return both 65 years old have a tax base of $26,600.  If the total SS benefit of both exceed this base amount than income tax applies as outlined in the tax law.

0 Kudos
3,978 Views
3
Report
Honored Social Butterfly

@RobertH489899 

If I am interpreting your post correctly, you are talking about taxable income (all of it) - or the adjusted gross income and the applicable standard deduction for income tax pruposes.

 

The tax on Social Security benefits is different.  It is applicable over and above any regular income tax amount if the income thresholds are met.

See IRS Publication 915 - page 3 " Are Any of Your Benefits Taxable"

https://www.irs.gov/pub/irs-pdf/p915.pdf

 

These (2) different taxes actually go into different funds at the government level.

Income tax actually goes to the Treasury for the General Fund.

Social Security Tax on Benefits goes to the Social Secuity Trust Fund (Old Age and Survivors)

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
3,962 Views
2
Report
Regular Contributor

Hi Gail1,

 

My comment was aimed at the age requirements imposed on taxation of benefits.  The difference between taxes on those whom are early retirees (under the FRA) and those whom are at or over the FRA.  My $26,600 figure is correct for MFJ early retirees.

 

0 Kudos
3,902 Views
1
Report
Honored Social Butterfly


@RobertH489899 wrote:

Hi Gail1,

 

My comment was aimed at the age requirements imposed on taxation of benefits.  The difference between taxes on those whom are early retirees (under the FRA) and those whom are at or over the FRA.  My $26,600 figure is correct for MFJ early retirees.

 


There is NO taxation of benefits based on an age requirement.

The tax on SS benefits is based on an income amount - not age.

See IRS Publication 915 - page 3 " Are Any of Your Benefits Taxable"

https://www.irs.gov/pub/irs-pdf/p915.pdf

 

Are you talking about the reduction of SS beneftis if not full retirement age based on income?

This:  Social Security: How Work Affects Your Benefit

 

From the link:

You can get Social Security retirement or survivors benefits and work at the same time. But, if you’re younger than full retirement age, and earn more than certain amounts, your benefits will be reduced. The amount that your benefits are reduced, however, isn’t truly lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings.

 

If so, this isn't a tax - it is merely a hold back until FRA is reached and it is based on the individual's earnings, not MFJ.

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
3,893 Views
0
Report
Gold Conversationalist

@ronaldd216236  If you have read my message (5) I have now had some time to look at the IRS information for filing my 2018 taxes. From what I have figured so far I can now drop the amount that is being withheld from my SS because the amount withheld from my retirement will cover my taxes plus I get some money back. 

 

You may want to take a look at this and see how it is going to affect your taxes.

https://www.irs.gov/forms-pubs/about-form-1040

0 Kudos
4,093 Views
0
Report
Honored Social Butterfly


@ronaldd216236 wrote:

why do marry couples pay more in social security taxes on there income?My wife should be tax a 25 thosand and me 25   thosand.


Age has nothing to do with the amount of tax you or you and your wife might have to pay on your Social Security benefit(s) - it goes by income - all income and your filing (living) status.

 

The base amounts are as follows:  IRS Publication 915 (2017)

Your base amount 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 all of 2017;
$32,000 if you are married filing jointly; or
$-0- if you are married filing separately and lived with your spouse at any time during 2017.

 

Figuring total income:
To figure the total of one-half of your benefits plus your other income, use Worksheet A, discussed later. If the total is more than your base amount, part of your benefits may be taxable.

 

If you are married and file a joint return for 2017, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable.

 

Who is taxed:

Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits.

 

Why do they set it up like this ?  

Most likely because two can live cheaper than one because there are shared expenses when you live together - housing cost, utilities, perhaps food, etc.

Would living apart save you any money, all things considered?

 

Actually, it is all about numbers - which I am not good about explaining but can give you the history and the logic behind how and why the law was developed (1983 - Social Security Reform) and changed in 1993 and the number logic behind the base amounts and even the taxed amount, if you can understand all the technical stuff.

 

Social Security.gov - Historic Research Policy Document - Income Taxes on Social Security Benefits

 

If it is any consolation, any tax that you or you and your wife and millions of others pay goes into the Social Security Trust Fund to help preserve it and more and more beneficiaries are paying it every year since these base amounts have not been tied to inflation.

 

I would rather pay the tax than be a poor senior just living off their SS benefit with no other available income.  

 

 

 

 

 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
4,762 Views
0
Report
Gold Conversationalist

@ronaldd216236

Sorry,  I don't understand your question. Have you visited the Social Security web site, do you have an account, plus check out the FAQs (Answers), you may find your answer there.

 

https://www.ssa.gov/

0 Kudos
4,788 Views
3
Report
Newbie

Response to Ronaldd216236

Sorry for challenging your response.  I think it is rude and you don't really know what you are discussing.   I'll try to explain it.   2 single people making SS and pulling 30K each from their IRA would pay about taxes on about 50% of their SS benefits.  If married they would pay their taxes on 85% of their SS.   You have to be old and collecting SS to realize this.   So his question is why we they have to pay 3K more in taxes as married vs single.  How did we get the tax rules penalizing older people for being married?  The tax penality is supposed to be gone.  It is for folks not taking SS. 

Now my question is.  Is there any group of people working on this condition.  How do we get it changed?

0 Kudos
4,149 Views
2
Report
Honored Social Butterfly


@r289123h wrote:

 

2 single people making SS and pulling 30K each from their IRA would pay about taxes on about 50% of their SS benefits. 

 

If married they would pay their taxes on 85% of their SS.  

 

You have to be old and collecting SS to realize this.  

 

So his question is why we they have to pay 3K more in taxes as married vs single. 

 

How did we get the tax rules penalizing older people for being married? 


That is not the rule at all - there is a difference in the limits between an individual and a couple filing jointly and they are not what you quoted.

 

SSA: Income Taxes and Your Social Security Benefit

 

 IRS - FAQ - Taxation of Social Security Benefit

 

INDIVIDUAL :  file a federal tax return as an "individual" and your combined income* is: 

  • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $34,000, up to 85 percent of your benefits may be taxable.

 

MFJ:  file a joint return, and you and your spouse have a combined income* that is 

  • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $44,000, up to 85 percent of your benefits may be taxable.

See the difference in the limits.

 

Both are figured as the adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your "combined income"

 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
4,104 Views
0
Report
Gold Conversationalist

@r289123h  You said, "

Response to Ronaldd216236

Sorry for challenging your response. ".

 

Ronald216236 started this topic, not a response.

 

I don't see any change here in taxes and what I have to pay.

 

Since I get both SS and my retirment I know I will have to pay taxes on the total amount (Taxable Amount). This is the reason I have SS withhold money for tax purposes. I did have that amount lowered back in February of this year due to the new tax laws. Now I have to wait and see  how that works out when I file for 2018.

 

When I was working as a firefighter and had a part time job at the end of the year I ended up paying to IRS. After a couple of years of having to pay I asked my part time job to withhold more money on each pay check. By doing that at the end of each year I broke even or at least got some money back when I filed my taxes.

0 Kudos
4,134 Views
0
Report
cancel
Showing results for 
Show  only  | Search instead for 
Did you mean: 
Users
Announcements

Try the new AARP Perks browser tool! Get timely reminders about AARP resources, discounts, and other member benefits as you browse online. Install AARP Perks now.

AARP Perks

Members Can Play More

Membership unlocks free online games and puzzles including classic Atari Games. Join today for just $12 per year with Automatic Renewal.

AARP Membership

AARP Rewards

Activate AARP Rewards to earn points for games, quizzes and videos. Redeem for deals and discounts. Get started with AARP Rewards now!

AARP Rewards Badge

Music and Brain Health

From soft jazz to hard rock - discover music's mental, social and physical benefits. Learn more.

Music and Brain Health