If you receive Social Security benefits, you may have to pay federal taxes on a fraction of their profits.
What is IRS Form SSA-1099?
These tips from the IRS will help determine whether or not to pay taxes on their benefits.These tips will also explain the best way to file your taxes when receiving social security benefits. Knowing IRS rules and regulations can save retirees significant amounts of money by properly using Form SSA-1099.
Filing Form SSA-1099
- Form SSA-1099. If you received Social Security benefits in 2014, should receive Form 1099-SSA (Social Security Benefit Statement, in English), showing the amount of your benefits. An SSA-1099 is a tax form we mail each year in January to people who receive Social Security benefits. It shows the total amount of benefits you received from Social Security in the previous year so you know how much Social Security income to report to IRS on your tax return. If you are a noncitizen who lives outside of the United States and you received or repaid Social Security benefits last year, we will send you form SSA-1042S instead. Other 1099 forms (Form 1099-R etc.) have variations for reporting distributions (payments) from retirement benefit, annuities and other retirement plans
- Only Social Security. If your Social Security benefits were their only source of income in 2014, many of their benefits are not taxable. Also you may have to not file a tax return. If you receive income from other sources, you may have to pay taxes on a portion of their profits.
- Free File. Use IRS Free File to prepare and electronically file your taxes for free. If you earned $ 60,000 or less, you can use the program commercial tax preparation. The program does the math and helps you avoid mistakes. If you earned more than $ 60,000, you can use the Free File Fillable Forms. This option uses the electronic versions of IRS paper forms. This option is best for people who are used to prepare their own taxes. Free File is available only in IRS.gov/freefile.
Calculating Tax on Social Security Benefits
Tax Formula. A quick way to determine whether you must pay taxes on their profits is by adding half of their social security benefits to total revenues, including federal tax exempt interest. Then compare the total to the corresponding civil status base amount. If the total is more than the base amount for your filing status, then your benefits may be taxable.
- $ 25,000 – if you are single, head of household, qualifying widow or widower / or widowed / a with a child / a dependent or married / a filing your taxes separately and you lived apart from your spouse for all of 2014
- $ 32,000 – if a married couple filing a joint return
- $ 0 – if you are married filing separately and you lived with your spouse at any time during the year
Many states exempt social security and other government pensions from state income taxes.
- Some states allow a fixed or computed dollar deduction, or completely exempt some federally taxed pensions.
- Some states tax social security and RRB pensions the same as federal tax laws.
- Some states tax social security but not RRB.
This information will be reported on Form SSA-1099 Social Security and Taxes 2015
Tier 1 railroad retirement benefits are equal to the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. These benefits are called “social security equivalent benefits” and, for tax purposes, are treated like social security benefits. They are shown on the blue Form RRB-1099.
Additional Resources IRS on Form SSA-1099:
Social Security mailed the SSA-1099s for tax year 2014 to all beneficiaries in January in 2015. If you receive Social Security and need a replacement SSA-1099 for 2014 in order to file a tax return, you can request it online at www.socialsecurity.gov/i1099. The SSA-1099 shows the total amount of benefits received in the previous year and is used to find out if any Social Security benefits are subject to tax.
- Social Security Income – Frequently asked questions (in English)
- Publication 915 , Social Security Benefits and Equivalent Railroad Retirement (in English)
Did not receive Form SSA-1099?
Social security benefits are reported on Form SSA-1099. Taxpayers who did not receive Form SSA-1099, or have misplaced it, may be able to get an instant printout of benefits from their personal “my Social Security” account on the Social Security Administration website at SSA.gov. Or taxpayers may call toll-free 1-800-772-1213 to request a benefit statement to be sent by mail. It is very important to have information on Form SSA-1099 when filing taxes in order to properly pay tax on Social Security benefits.