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Maximum Social Security Withholding – UPDATED for 2018, social security income limits.#Social #security #income #limits

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Social Security Maximum Withholding UPDATED Through 2018

Social security income limits

Social security income limits

The Social Security Administration has announced the 2018 Social Security benefit amounts and the maximum withholding change for the 2018 tax year.

The maximum taxable earnings for Social Security withholding for 2018 are $128,700. This maximum is up from $127,200 for 2017.

Medicare withholding has no maximum. The maximum withholding amount is adjusted each year by a formula based on cost of living increases.

What is the Social Security Withholding?

The Social Security tax is a federal tax imposed on employers, employees and self-employed individuals. It is used to pay the cost of benefits for elderly recipients, survivors of recipients, and disabled individuals (OASDI Insurance).

Social Security tax is one of the payroll taxes paid by employees, employers, and self-employed individuals each year. The Social Security withholding rate is set using a formula based on inflation.

The Social Security tax rate is 12.4 percent; 6.2 percent is withheld from each of the employer and employee. The full 12.4 percent is paid by self-employed individuals. The Medicare withholding and employer-paid amounts are added to the Social Security rate to get what s called FICA taxes. The Medicare rates are 1.45% each, for a total of 2.9%. So the total FICA tax amount is 15.3%.

Social Security Benefit vs. Social Security Withholding

Sometimes people get the maximum Social Security benefit and the maximum Social Security withholding confused.

The maximum benefit is the highest amount someone can receive as a Social Security benefit each month. This benefit is based on age at retirement. For someone retiring at full retirement age in 2018, the maximum benefit at $2,788, with lower amounts for people retiring at less than the full retirement age.

The maximum withholding is the most that can be taken from an employee s pay for the OASDI (Social Security) fund.

What are the Current and Past Social Security Maximums?

Social Security taxes are withheld up to a maximum amount, which changes each year. Here are the maximum wages subject to Social Security for the past few years:

The maximum OASDI (Social Security) tax payable by an employee in 2018 would be $7979.40 ($128,700 x 6.2%). There is no maximum Social Security tax payable by an employer.

Social Security Tax vs. FICA Tax

The term Social Security tax or OASDI is often confused with FICA taxes, which include both Social Security and Medicare taxes.

What is the Medicare Tax?

The Medicare tax rate is 1.45 percent for both employers and employees, with the self-employed Medicare rate at 3.3 percent. There is no limit on Medicare taxes; Medicare tax is payable on all income, without a maximum. For higher-income individuals, there is an additional Medicare tax of 0.9% on income over a specific maximum, depending on the individual s tax filing status.

Self-employment Tax and Social Security Tax

Income from both self-employment and from employment (wages and tips) are included in income for the Social Security maximum. The total self-employment tax rate is 15.3% of the net profit of the company owned by the individual, with the Social Security portion at 12.4% of that total.

How Self-Employment Tax Affects the Social Security Maximum

If your only income is from self-employment, the social security maximum is still in effect. That is, the Social Security portion of your self-employment tax is capped at the maximum profit of the company, depending on the maximum for that year. For example, if you have only self-employment, and the net earnings on your Schedule C is $125,000 for 2017, you would only be taxed for self-employment tax on the 2017 maximum of $127,200.

If an individual has income from both employment and self-employment, the employment income is considered first for social security purposes. If the maximum is not reached, then self-employment income is also considered, up to the amount of the maximum. This article on Income from Employment and Self-employment might help clear up some of the confusion.


Is Social Security Income Taxable? Social Security Taxes, social security income.#Social #security #income

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Are Social Security Benefits Taxable Income?

If you receive Social Security benefits, you will be sent a Form 1099-SSA, which will show the total dollar amount of your Social Security income for the year. But do you have to pay taxes on your Social Security benefits?

If you have income from other sources besides Social Security, it is possible that a portion of your Social Security income will be taxable. Whether it is, and how much of it is taxable, depends on your marital status and your total income from all sources.

Is My Social Security Income Taxable?

Generally, your Social Security income will only be taxed if you have income from other sources and your combined income is more than a certain base amount.

What Are Examples of Social Security Income?

Social security income includes:

  • Disability benefits
  • Pension
  • Monthly retirement benefits
  • Survivor benefits

Are There Types of Income That Are Not Considered Social Security Income?

Social Security income does not include Supplemental Security Income payments. Those payments are not taxable.

If Social Security is My Only Income, Is It Taxable? Do I Have to File a Tax Return?

Your Social Security income is almost never taxable and you may not need to file a tax return (your benefits would have to be unusually generous for the income to be taxable).

Will My Social Security Income Be Taxed If I Have Other Types of Income?

If you also had income from other sources, your Social Security income will only be taxed if your combined income is more than a certain amount. This amount (called the base amount ) depends on your filing status, but you don t just add all of your income together and compare it to the base amount (no, it couldn t be that simple). There is a worksheet to figure it all out. This is because, even if your Social Security is taxable, only a portion of it will actually be taxed. The maximum amount that may be taxed is 85% and this is all calculated by the efile.com.

There are a few things that could make the computations even more complicated, and could make you owe a bit more or less tax on your benefits. These include receiving foreign income, receiving and excluding income from Series EE or Series I U.S. Savings Bonds, receiving adoption assistance from your employer, contributing to an IRA while being covered by a qualified retirement plan, and receiving Railroad Retirement Benefits.

A Quick Way to Tell if Your Social Security Income Might Be Taxable or Not:

Important: The income amounts below are for 2016 tax returns. We will update them once the IRS releases the 2017 income amounts.

  1. Add half of your Social Security income to all of your other income, including non-taxable interest and other excluded income.
  2. Compare this total to the base amount for your filing status:
    • $25,000 for Single, Head-of-Household, Qualifying Widow(er) with Dependent Child, and Married Filing Separatelyif the spouses did not live together at all during the year
    • $32,000 for Married Filing Jointly
    • $0 for Married Filing Separately if the spouses lived together during the year
  3. If your total income is more than the base amount, you might owe some tax on your Social Security benefits. You can use the worksheet in the Form 1040 Instructions, or efile.com, to find out exactly how much of your Social Security income is taxable.

TaxTip: Because it is so complicated to calculate the amount of Social Security income that is taxable, it is highly recommended that you use tax software, such as efile.com, to prepare your tax return.

Why Do I Pay Social Security Taxes?

Just about everyone who earns an income from working has to pay FICA (Federal Insurance Contributions Act) tax. This payroll tax is made up of Social Security and Medicare taxes, which are used to ensure that those government programs remain funded.

How Do I Pay Social Security and Medicare Taxes?

Employees generally have Social Security and Medicare taxes withheld from their pay along with income taxes. The self-employed have to pay Social Security and Medicare taxes through self-employment taxes.

How Much Are Social Security and Medicare Taxes?

The 2017 rates for employee FICA taxes are:

The amount that you pay in Social Security taxes throughout one s working career is associated with the social security benefits that you receive later in life, but the amount you contribute will not equal the amount of benefits to which you have access.

What Are the Limits on Social Security Taxes?

You generally owe Social Security taxes on the first $127,200 of your 2017 gross income. Medicare taxes are generally paid on 100% of your annual income.

What Is Excess Social Security Tax?

If you had more than one employer who each withheld taxes from your pay, and if your total gross income was over $127,200 in 2017, you may have had too much money withheld for Social Security taxes. Any Social Security taxes paid on Tax Year 2017 income from $127,200 to infinity is considered excess social security tax and will be refunded to you (or credited against your income tax balance due) when you file a tax return.

If your employer erroneously withheld too much Social Security taxes from your pay (for example, more than 4.2%), you should ask your employer for a refund of the overpayment before filing a tax return.

Can I efile Social Security Income on My Tax Return?

If you prepare your tax return on efile.com, and you have taxable income, we will determine the correct amount of tax on your Social Security benefits, and the correct forms for you to use. If any amount of your Social Security benefits are taxable, you can file your tax return on Form 1040A or Form 1040(Not sure which form you should file? Find out which Form 1040 to file).

Can I Prepare, efile a Tax Return with Social Security Income on Form 1040-EZ?

Unfortunately, taxable Social Security income cannot be claimed on a Form 1040EZ, so you will not qualify to use the Free Federal Edition. However our prices for preparing a 1040A efile it or a 1040 efile it are the lowest around (and the accuracy, ease-of-use, and peace-of-mind are well worth the low price)!

Can I Prepare a Tax Return Online with Only Social Security Income?

If your only income is nontaxable, then you are not required to file a tax return (see the filing requirements), and regrettably, efile.com will not be able to generate a return for you.

Start Your Tax Return

Social security income Why efile.com

Social security income Biggest, Fastest Tax Refund

Social security income Dare to Compare

Social security income Free Basic – Form 1040EZ is FREE

No credit card needed. Deduct fee from refund.

Unlimited State Returns for only $19.95

Learn about state return preparation” data-toggle=”popover” href=”javascript:void(0)” rel=”popover” id=”rightPrices”>Lowest Price Guarantee


Social Security Disability Earning Limits, social security income limits.#Social #security #income #limits

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Social Security Disability Earning Limits

Because the Social Security Administration wants to help only those who truly can t help themselves, it has income restrictions for disability benefits. Many disabled people in the United States don t qualify for Social Security Disability, either because they make too much money or their disability isn t considered severe enough. If you re not sure if you earn too much to collect Social Security Disability, it never hurts to find out.

SSDI Limits

Social Security Disability Insurance is the main benefits program for disabled workers and children. As of 2010, if you are disabled your income limit is $1,000 a month to obtain SSDI. If you are blind, the income limit is $1,640 a month to receive SSDI benefits.

SSI Limits

Supplementary Security Income is the other program that pays benefits to disabled workers. The SSA also pays this benefit to those who are over 65 and non-disabled — the main requirement is that all SSI beneficiaries be low-income. The income threshold for SSI varies by state, so check with your local Social Security office to see if you qualify (see Resources to find your local office). If you do qualify for SSI and your income increases in any given month, your SSI benefit will decrease in order to stay under your state s limits.

Trial Work Period

If you re receiving SSDI and starting to work again, you will continue to receive benefits regardless of your income for your nine-month trial period. Any month will count as a trial month as long as you make at least $720 that month, as of 2010. The nine-month trial period doesn t have to be consecutive; the only requirement is that it takes place within a 60-month period.

Extended Eligibility

As of 2010, for the 36 months following your trial work period, if you are making at least $1000 a month you will no longer receive benefits. However, during this 36-month period, you may opt to rely on your benefits again if your income suddenly drops below $1000 (or $1640 if you re blind). Following this 36-month period, you have five years in which you can ask Social Security to start your benefits again if your condition makes it too difficult to work regularly. After those five years, you must re-apply for disability benefits.

Financial Benefits of Working While Disabled

If you are able to hold down a job while collecting Disability, the money you earn may serve you well in your distant future. Even if you are receiving Social Security, you still pay Social Security taxes through withholding by your employer. Thus, the more you work, the higher your future retirement benefit will be up tp a certain benefit limit. Because Disability benefits automatically convert into Retirement benefits when you reach full retirement age, the SSA always recalculates benefits to ensure you re receiving the proper amount. If you work while collecting disability benefits, there s a good chance your future retirement benefit will be much higher than your current disability benefit.


Maximum Social Security Withholding – UPDATED for 2018, social security income limits.#Social #security #income #limits

by ,

Social Security Maximum Withholding UPDATED Through 2018

Social security income limits

Social security income limits

The Social Security Administration has announced the 2018 Social Security benefit amounts and the maximum withholding change for the 2018 tax year.

The maximum taxable earnings for Social Security withholding for 2018 are $128,700. This maximum is up from $127,200 for 2017.

Medicare withholding has no maximum. The maximum withholding amount is adjusted each year by a formula based on cost of living increases.

What is the Social Security Withholding?

The Social Security tax is a federal tax imposed on employers, employees and self-employed individuals. It is used to pay the cost of benefits for elderly recipients, survivors of recipients, and disabled individuals (OASDI Insurance).

Social Security tax is one of the payroll taxes paid by employees, employers, and self-employed individuals each year. The Social Security withholding rate is set using a formula based on inflation.

The Social Security tax rate is 12.4 percent; 6.2 percent is withheld from each of the employer and employee. The full 12.4 percent is paid by self-employed individuals. The Medicare withholding and employer-paid amounts are added to the Social Security rate to get what s called FICA taxes. The Medicare rates are 1.45% each, for a total of 2.9%. So the total FICA tax amount is 15.3%.

Social Security Benefit vs. Social Security Withholding

Sometimes people get the maximum Social Security benefit and the maximum Social Security withholding confused.

The maximum benefit is the highest amount someone can receive as a Social Security benefit each month. This benefit is based on age at retirement. For someone retiring at full retirement age in 2018, the maximum benefit at $2,788, with lower amounts for people retiring at less than the full retirement age.

The maximum withholding is the most that can be taken from an employee s pay for the OASDI (Social Security) fund.

What are the Current and Past Social Security Maximums?

Social Security taxes are withheld up to a maximum amount, which changes each year. Here are the maximum wages subject to Social Security for the past few years:

The maximum OASDI (Social Security) tax payable by an employee in 2018 would be $7979.40 ($128,700 x 6.2%). There is no maximum Social Security tax payable by an employer.

Social Security Tax vs. FICA Tax

The term Social Security tax or OASDI is often confused with FICA taxes, which include both Social Security and Medicare taxes.

What is the Medicare Tax?

The Medicare tax rate is 1.45 percent for both employers and employees, with the self-employed Medicare rate at 3.3 percent. There is no limit on Medicare taxes; Medicare tax is payable on all income, without a maximum. For higher-income individuals, there is an additional Medicare tax of 0.9% on income over a specific maximum, depending on the individual s tax filing status.

Self-employment Tax and Social Security Tax

Income from both self-employment and from employment (wages and tips) are included in income for the Social Security maximum. The total self-employment tax rate is 15.3% of the net profit of the company owned by the individual, with the Social Security portion at 12.4% of that total.

How Self-Employment Tax Affects the Social Security Maximum

If your only income is from self-employment, the social security maximum is still in effect. That is, the Social Security portion of your self-employment tax is capped at the maximum profit of the company, depending on the maximum for that year. For example, if you have only self-employment, and the net earnings on your Schedule C is $125,000 for 2017, you would only be taxed for self-employment tax on the 2017 maximum of $127,200.

If an individual has income from both employment and self-employment, the employment income is considered first for social security purposes. If the maximum is not reached, then self-employment income is also considered, up to the amount of the maximum. This article on Income from Employment and Self-employment might help clear up some of the confusion.


Taxation of Social Security benefits, social security income limits.#Social #security #income #limits

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Taxation of Social Security benefits

Since the passage of the 1983 Amendments to the Social Security Act [1] Social Security benefits are subject to taxation.

The amount of Social Security income which is taxable depends on your taxable income. Most high-income retirees will have 85% of Social Security benefits taxable. For lower-income retirees, less than 85% will be taxable, but many retirees in a 15% tax bracket will face a marginal tax rate much higher than 15%. Social security benefits are also taxable in some states (see Figure 1.)

For social security taxes imposed on earned wages, see the Social Security article.

Contents

The full rules are in IRS Publication 915. [2] [note 1] This simplification covers most cases; there are special rules if you contribute to a Traditional IRA, receive retroactive payments for prior years, or file forms to exempt other income from taxation. [3]

The relevant income for Social Security taxation includes all items which are normally part of your adjusted gross income, plus tax-exempt interest income, plus 50% of your Social Security benefits. (Historically, the 50% represents the fact that half of your Social Security contributions were made by your employer and thus not taxed.) [4]

There are two relevant base amounts; unlike most income limits in the tax code, they are not adjusted for inflation. The lower base is $25,000 if you are single, $32,000 if married filing jointly. The upper base is $34,000 if you are single, $44,000 if married filing jointly. [5]

If your relevant income is below the lower base, none of your benefits are taxable. For every $1 of relevant income between the lower and upper bases, 50 cents of your Social Security benefits become taxable, up to 50% of your total benefits. For every $1 of relevant income above the upper bases, 85 cents of your Social Security benefits become taxable, up to a total taxable amount of 85% of your benefits. [6]

Social security income limits

The examples below are based on tax numbers for 2018. [note 2] They illustrate how tax brackets and Social Security taxation interact, creating a 27.75% marginal tax rate for most taxpayers in the 15% tax bracket, and a 46.25% marginal tax rate for some single taxpayers but only married taxpayers with very high Social Security benefits at the bottom of the 25% bracket.

If you are single and receive $20,000 in Social Security benefits:

  • None of your benefits are taxable if your other income is less than $15,000.
  • For every dollar between $15,000 and $24,000, an additional 50 cents becomes taxable.
  • For every dollar over $24,000, an additional 85 cents becomes taxable, up to a total other income of $38,706, which makes the maximum $17,000 taxable.

The table below assumes that you have no dependents (exemption of $4,150) and take the standard deduction ($8,100 for a taxpayer over 65), so your first $12,250 of income is not taxable.

In graphical form (using 2016 rates) [7] , assuming the non-SS income comes from tIRA withdrawals,

Social security income limits

If you are a married couple and receive $40,000 in Social Security benefits:

  • None of your benefits are taxable if your other income is less than $12,000.
  • For every dollar between $12,000 and $24,000, an additional 50 cents becomes taxable.
  • For every dollar over $24,000, an additional 85 cents becomes taxable, up to a total other income of $56,941, which makes the maximum $34,000 taxable.

The table below assumes that you have no dependents (exemption of $8,300) and take the standard deduction ($15,600 for a married couple over 65), so your first $23,900 of income is not taxable.

In graphical form (using 2016 rates) [7] , assuming the non-SS income comes from tIRA withdrawals,

Social security income limits

There is no 46.25% rate in this situation because the example couple reaches the maximum taxable benefit amount well before reaching the 25% tax bracket. Every additional $1 of Social Security increases the income at the maximum taxable benefit amount by $1.35 (because the phase-in starts $0.50 earlier and ends $0.50 later, and $0.85 more SS is taxed). To reach the 46.25% marginal rate, the couple would need to exceed $47,673 in SS benefits; at $47,673 in benefits, $60,778 in other income makes the maximum $40,522 of Social Security taxable, for a total income of $101,300 at the top of the 15% bracket.

Social security income limits

While most states do not tax social security benefits (shaded blue in figure; along with green shaded states which do not impose income tax), six states tax benefits to the extent they are taxed at the federal level (shaded lavender), while eight states exempt social security benefits from taxation subject to limits (shaded yellow).

The states that tax benefits to the extent they are taxed at the federal level include:

The states that tax social security benefits subject to limits include:

  • Colorado: If a household meets certain age requirements qualifying retirement income can be excluded from income if it is taxable under federal income tax. [14]
  • Connecticut: Allows taxpayers to totally exempt social security from state income tax if income is less than $60,000 (joint filers). [15]
  • Iowa: In 2013 exempts a certain portion of benefits from income tax. In 2014 the exemption will increase to 100%. [16]
  • Kansas: Exempts social security benefits from state taxation if federal adjusted income is less than $75,000. [17]
  • Missouri: Allows taxpayers with adjusted gross income of less than $100,000 (joint filers) to deduct all social security benefits from income. [18]
  • Montana: Some social security benefits may be taxable (state advises filling out a worksheet); in general if total income is below $32,000 joint filers, benefits will not be subject to tax. [19]
  • New Mexico : Benefits are taxable, but a person can qualify for an exemption if he or she is 65 years of age or older. [20]
  • Utah: If a household meets certain age requirements qualifying retirement income can be offset by credit, which is phased out once income exceeds a certain level. [21]

Is Social Security Income Taxable? Social Security Taxes, social security income.#Social #security #income

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Are Social Security Benefits Taxable Income?

If you receive Social Security benefits, you will be sent a Form 1099-SSA, which will show the total dollar amount of your Social Security income for the year. But do you have to pay taxes on your Social Security benefits?

If you have income from other sources besides Social Security, it is possible that a portion of your Social Security income will be taxable. Whether it is, and how much of it is taxable, depends on your marital status and your total income from all sources.

Is My Social Security Income Taxable?

Generally, your Social Security income will only be taxed if you have income from other sources and your combined income is more than a certain base amount.

What Are Examples of Social Security Income?

Social security income includes:

  • Disability benefits
  • Pension
  • Monthly retirement benefits
  • Survivor benefits

Are There Types of Income That Are Not Considered Social Security Income?

Social Security income does not include Supplemental Security Income payments. Those payments are not taxable.

If Social Security is My Only Income, Is It Taxable? Do I Have to File a Tax Return?

Your Social Security income is almost never taxable and you may not need to file a tax return (your benefits would have to be unusually generous for the income to be taxable).

Will My Social Security Income Be Taxed If I Have Other Types of Income?

If you also had income from other sources, your Social Security income will only be taxed if your combined income is more than a certain amount. This amount (called the base amount ) depends on your filing status, but you don t just add all of your income together and compare it to the base amount (no, it couldn t be that simple). There is a worksheet to figure it all out. This is because, even if your Social Security is taxable, only a portion of it will actually be taxed. The maximum amount that may be taxed is 85% and this is all calculated by the efile.com.

There are a few things that could make the computations even more complicated, and could make you owe a bit more or less tax on your benefits. These include receiving foreign income, receiving and excluding income from Series EE or Series I U.S. Savings Bonds, receiving adoption assistance from your employer, contributing to an IRA while being covered by a qualified retirement plan, and receiving Railroad Retirement Benefits.

A Quick Way to Tell if Your Social Security Income Might Be Taxable or Not:

Important: The income amounts below are for 2016 tax returns. We will update them once the IRS releases the 2017 income amounts.

  1. Add half of your Social Security income to all of your other income, including non-taxable interest and other excluded income.
  2. Compare this total to the base amount for your filing status:
    • $25,000 for Single, Head-of-Household, Qualifying Widow(er) with Dependent Child, and Married Filing Separatelyif the spouses did not live together at all during the year
    • $32,000 for Married Filing Jointly
    • $0 for Married Filing Separately if the spouses lived together during the year
  3. If your total income is more than the base amount, you might owe some tax on your Social Security benefits. You can use the worksheet in the Form 1040 Instructions, or efile.com, to find out exactly how much of your Social Security income is taxable.

TaxTip: Because it is so complicated to calculate the amount of Social Security income that is taxable, it is highly recommended that you use tax software, such as efile.com, to prepare your tax return.

Why Do I Pay Social Security Taxes?

Just about everyone who earns an income from working has to pay FICA (Federal Insurance Contributions Act) tax. This payroll tax is made up of Social Security and Medicare taxes, which are used to ensure that those government programs remain funded.

How Do I Pay Social Security and Medicare Taxes?

Employees generally have Social Security and Medicare taxes withheld from their pay along with income taxes. The self-employed have to pay Social Security and Medicare taxes through self-employment taxes.

How Much Are Social Security and Medicare Taxes?

The 2017 rates for employee FICA taxes are:

The amount that you pay in Social Security taxes throughout one s working career is associated with the social security benefits that you receive later in life, but the amount you contribute will not equal the amount of benefits to which you have access.

What Are the Limits on Social Security Taxes?

You generally owe Social Security taxes on the first $127,200 of your 2017 gross income. Medicare taxes are generally paid on 100% of your annual income.

What Is Excess Social Security Tax?

If you had more than one employer who each withheld taxes from your pay, and if your total gross income was over $127,200 in 2017, you may have had too much money withheld for Social Security taxes. Any Social Security taxes paid on Tax Year 2017 income from $127,200 to infinity is considered excess social security tax and will be refunded to you (or credited against your income tax balance due) when you file a tax return.

If your employer erroneously withheld too much Social Security taxes from your pay (for example, more than 4.2%), you should ask your employer for a refund of the overpayment before filing a tax return.

Can I efile Social Security Income on My Tax Return?

If you prepare your tax return on efile.com, and you have taxable income, we will determine the correct amount of tax on your Social Security benefits, and the correct forms for you to use. If any amount of your Social Security benefits are taxable, you can file your tax return on Form 1040A or Form 1040(Not sure which form you should file? Find out which Form 1040 to file).

Can I Prepare, efile a Tax Return with Social Security Income on Form 1040-EZ?

Unfortunately, taxable Social Security income cannot be claimed on a Form 1040EZ, so you will not qualify to use the Free Federal Edition. However our prices for preparing a 1040A efile it or a 1040 efile it are the lowest around (and the accuracy, ease-of-use, and peace-of-mind are well worth the low price)!

Can I Prepare a Tax Return Online with Only Social Security Income?

If your only income is nontaxable, then you are not required to file a tax return (see the filing requirements), and regrettably, efile.com will not be able to generate a return for you.

Start Your Tax Return

Social security income Why efile.com

Social security income Biggest, Fastest Tax Refund

Social security income Dare to Compare

Social security income Free Basic – Form 1040EZ is FREE

No credit card needed. Deduct fee from refund.

Unlimited State Returns for only $19.95

Learn about state return preparation” data-toggle=”popover” href=”javascript:void(0)” rel=”popover” id=”rightPrices”>Lowest Price Guarantee


Social security retirement income estimator, Calculators by CalcXML, social security income.#Social #security #income

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Social security retirement income estimator

Depending upon your current earnings, Social Security can be a significant part of your retirement income. However, many factors will impact the benefit you may receive. Use this calculator to approximate your Social Security benefit. For a more accurate estimate, taking into account your earnings history, contact the Social Security Administration at 1-800-772-1213 or visit www.ssa.gov.

Social security income

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.

Social security incomeSocial security income


Maximum Social Security Withholding – UPDATED for 2018, social security income.#Social #security #income

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Social Security Maximum Withholding UPDATED Through 2018

Social security income

The Social Security Administration has announced the 2018 Social Security benefit amounts and the maximum withholding change for the 2018 tax year.

The maximum taxable earnings for Social Security withholding for 2018 are $128,700. This maximum is up from $127,200 for 2017.

Medicare withholding has no maximum. The maximum withholding amount is adjusted each year by a formula based on cost of living increases.

What is the Social Security Withholding?

The Social Security tax is a federal tax imposed on employers, employees and self-employed individuals. It is used to pay the cost of benefits for elderly recipients, survivors of recipients, and disabled individuals (OASDI Insurance).

Social Security tax is one of the payroll taxes paid by employees, employers, and self-employed individuals each year. The Social Security withholding rate is set using a formula based on inflation.

The Social Security tax rate is 12.4 percent; 6.2 percent is withheld from each of the employer and employee. The full 12.4 percent is paid by self-employed individuals. The Medicare withholding and employer-paid amounts are added to the Social Security rate to get what s called FICA taxes. The Medicare rates are 1.45% each, for a total of 2.9%. So the total FICA tax amount is 15.3%.

Social Security Benefit vs. Social Security Withholding

Sometimes people get the maximum Social Security benefit and the maximum Social Security withholding confused.

The maximum benefit is the highest amount someone can receive as a Social Security benefit each month. This benefit is based on age at retirement. For someone retiring at full retirement age in 2018, the maximum benefit at $2,788, with lower amounts for people retiring at less than the full retirement age.

The maximum withholding is the most that can be taken from an employee s pay for the OASDI (Social Security) fund.

What are the Current and Past Social Security Maximums?

Social Security taxes are withheld up to a maximum amount, which changes each year. Here are the maximum wages subject to Social Security for the past few years:

The maximum OASDI (Social Security) tax payable by an employee in 2018 would be $7979.40 ($128,700 x 6.2%). There is no maximum Social Security tax payable by an employer.

Social Security Tax vs. FICA Tax

The term Social Security tax or OASDI is often confused with FICA taxes, which include both Social Security and Medicare taxes.

What is the Medicare Tax?

The Medicare tax rate is 1.45 percent for both employers and employees, with the self-employed Medicare rate at 3.3 percent. There is no limit on Medicare taxes; Medicare tax is payable on all income, without a maximum. For higher-income individuals, there is an additional Medicare tax of 0.9% on income over a specific maximum, depending on the individual s tax filing status.

Self-employment Tax and Social Security Tax

Income from both self-employment and from employment (wages and tips) are included in income for the Social Security maximum. The total self-employment tax rate is 15.3% of the net profit of the company owned by the individual, with the Social Security portion at 12.4% of that total.

How Self-Employment Tax Affects the Social Security Maximum

If your only income is from self-employment, the social security maximum is still in effect. That is, the Social Security portion of your self-employment tax is capped at the maximum profit of the company, depending on the maximum for that year. For example, if you have only self-employment, and the net earnings on your Schedule C is $125,000 for 2017, you would only be taxed for self-employment tax on the 2017 maximum of $127,200.

Learn how to start your own business or side hustle, and discover strategies to attract customers and pump up your profits.

If an individual has income from both employment and self-employment, the employment income is considered first for social security purposes. If the maximum is not reached, then self-employment income is also considered, up to the amount of the maximum. This article on Income from Employment and Self-employment might help clear up some of the confusion.


Social Security Disability Earning Limits #income #tax #return #2010

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Social Security Disability Earning Limits

Because the Social Security Administration wants to help only those who truly can’t help themselves, it has income restrictions for disability benefits. Many disabled people in the United States don’t qualify for Social Security Disability, either because they make too much money or their disability isn’t considered severe enough. If you’re not sure if you earn too much to collect Social Security Disability, it never hurts to find out.

SSDI Limits

Social Security Disability Insurance is the main benefits program for disabled workers and children. As of 2010, if you are disabled your income limit is $1,000 a month to obtain SSDI. If you are blind, the income limit is $1,640 a month to receive SSDI benefits.

SSI Limits

Supplementary Security Income is the other program that pays benefits to disabled workers. The SSA also pays this benefit to those who are over 65 and non-disabled — the main requirement is that all SSI beneficiaries be low-income. The income threshold for SSI varies by state, so check with your local Social Security office to see if you qualify (see “Resources” to find your local office). If you do qualify for SSI and your income increases in any given month, your SSI benefit will decrease in order to stay under your state’s limits.

Trial Work Period

If you’re receiving SSDI and starting to work again, you will continue to receive benefits regardless of your income for your nine-month trial period. Any month will count as a “trial month” as long as you make at least $720 that month, as of 2010. The nine-month trial period doesn’t have to be consecutive; the only requirement is that it takes place within a 60-month period.

Extended Eligibility

As of 2010, for the 36 months following your trial work period, if you are making at least $1000 a month you will no longer receive benefits. However, during this 36-month period, you may opt to rely on your benefits again if your income suddenly drops below $1000 (or $1640 if you’re blind). Following this 36-month period, you have five years in which you can ask Social Security to start your benefits again if your condition makes it too difficult to work regularly. After those five years, you must re-apply for disability benefits.

Financial Benefits of Working While Disabled

If you are able to hold down a job while collecting Disability, the money you earn may serve you well in your distant future. Even if you are receiving Social Security, you still pay Social Security taxes through withholding by your employer. Thus, the more you work, the higher your future retirement benefit will be up tp a certain benefit limit. Because Disability benefits automatically convert into Retirement benefits when you reach full retirement age, the SSA always recalculates benefits to ensure you’re receiving the proper amount. If you work while collecting disability benefits, there’s a good chance your future retirement benefit will be much higher than your current disability benefit.


These Social Security Income Limits Could Reduce Your Benefits – The Motley Fool #income #from

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These Social Security Income Limits Could Reduce Your Benefits

May 15, 2016 at 6:08PM

If you’re working and drawing Social Security, your benefits may be subject to income limitations. For those who won’t reach normal retirement age by the end of 2016, any earnings in excess of $15,720 ($1,130 per month) could reduce your Social Security benefits by $2 for every $1 above this threshold. Beneficiaries who will reach retirement age during 2016 are subject to a higher exemption amount.

Here are the details of the Social Security earnings test, and what it could mean to your monthly benefits as well as your future Social Security income.

Three categories of Social Security beneficiaries

In order to determine the effects of working on Social Security benefits, the Social Security Administration (SSA) separates beneficiaries into three categories.

  • The first category includes people who receive benefits, but will attain their normal retirement age after 2016. In this group, the first $15,720 of earnings are exempt and will have no effect on the ability to collect benefits. Any earnings above this amount will result in a benefit reduction of $1 for every $2 in excess earnings.

  • The second category includes beneficiaries who will attain their normal retirement age during 2016. This group has a higher exemption amount of $41,880, as well as a more favorable reduction formula. Their benefits are reduced by $1 for every $3 in excess earnings. What’s more, only earnings before the month of reaching normal retirement age are counted.

  • The final group includes Social Security recipients who have attained their normal retirement age (66 for those reaching retirement age now). This group is free to work and earn as much as they can without any benefit reduction.

Examples

First, consider a 63-year-old whose calculated Social Security benefit is determined to be $1,000 per month. If this person also receives a salary of $30,000 from working, the excess over the $15,720 threshold, or $14,280 will be counted for benefit reduction purposes. Because of their age, this individual’s benefits will be reduced by $1 for every $2 of excess earnings, so this translates to a $7,140 annual benefit reduction, or $595 per month. Therefore, their $1,000 calculated monthly benefit will be reduced to $405 because of their earnings.

Next, consider a 65-year-old beneficiary who will turn 66 in September, and who receives a $1,500 monthly Social Security benefit. Let’s say that this individual has a job with a $60,000 annual salary — or $5,000 per month. Although this salary is above the $41,880 earnings cap, the only earnings that count are those from January through August, or eight months’ worth. Since this only represents $40,000 of the total salary, there will be no benefit reduction.

You can get it back later

Finally, it’s important to point out that even though the Social Security earnings test can reduce your monthly benefit amount, there’s a positive trade-off later. For every month’s benefits that the SSA withholds, you’re treated as having taken benefits a month later than you actually did.

If your Social Security benefits are withheld because of your earnings, the effect is that your monthly benefit will be permanently increased once you reach normal retirement age and the earnings test no longer applies to you.

In other words, don’t let the fear of losing some of your benefits prevent you from filing for Social Security early if you want to do so. As you can see from the example, you could still potentially receive some Social Security income in the meantime, while boosting your benefits for later on when you’ve reached normal retirement age.

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