The commencement of the tax season has been declared by the IRS on January 29, signaling the imminent opportunity to submit your tax return. If you are a recipient of Social Security benefits, you may be contemplating whether filing taxes is necessary this year. Factors such as your age, marital status, and additional income beyond Social Security benefits play a role in determining whether you must submit a tax return to the IRS.
Additionally, even if filing isn’t mandatory, it could be beneficial if you wish to claim refundable tax credits or receive a refund for income taxes paid throughout the year. Let us assist you in determining whether you’ll need to file your taxes in 2024. For further information, explore the maximum monthly Social Security benefit and the anticipated COLA increase.
How can I determine if my Social Security benefits are subject to taxation?
Social Security benefits may be taxable if the sum of one-half of your Social Security benefits and all other income exceeds the base amount relevant to your filing status. The base amounts for tax liability determination are as follows:
- $25,000 for single filers, head of household, or a qualifying surviving spouse.
- $25,000 for married individuals filing separately who lived apart from their spouse in 2023.
- $32,000 for married couples filing jointly.
- $0 for married individuals filing separately who lived with their spouse.
Other sources of income encompass wages, self-employment earnings, interest, dividends, and other reported taxable income. A useful approach to assessing the taxability of your benefits involves considering your gross income, which encompasses total earnings before taxes.
You are required to file a return for the 2024 tax year if:
- You are an unmarried senior aged 65 or older, and your gross income exceeds $14,700.
- You are filing a joint return with a spouse who is also 65 or older, and your combined gross income exceeds $28,700.
- You are filing a joint return with a spouse under 65 years old, and your combined gross income exceeds $27,300.
Another method to determine the taxability of your Social Security benefits is by examining combined income, which consists of your adjusted gross income + nontaxable interest + half of your Social Security benefits.
For single tax filers:
- If your combined income falls between $25,000 and $34,000, the SSA indicates that you may be required to pay income tax on up to 50% of your benefits.
- If your combined income exceeds $34,000, you may be required to pay income tax on up to 85% of your benefits.
For joint filers:
- If your combined income is between $32,000 and $44,000, you may need to pay income tax on up to 50% of your benefits.
- If your combined income surpasses $44,000, you may be obligated to pay income tax on up to 85% of your benefits.
For married individuals filing separately:
- If you are married but lived separately from your spouse last year, your Social Security benefits are taxed as if you were a single filer.
- If you are married and filing separately while residing with your spouse, you may likely have to pay taxes on your benefits.
On line 6b of Form 1040 or Form 1040-SR, you will report the taxable portion of your Social Security benefits.
Is it advisable to file my 2023 taxes even if it’s not obligatory?
The primary motivation for filing a tax return, even when not mandated, is the opportunity to receive a tax refund. If you had federal income tax withheld from your earnings or made estimated tax payments in 2023, filing a tax return this year may result in a potential refund for any excess withholding.
Additionally, it is recommended to file if you qualify for tax credits that offer refunds, such as the earned income tax credit, child tax credit, or child and dependent care tax credit. The earned income tax credit is fully refundable, meaning it contributes to your tax refund even if you have no tax liability.
How do I obtain information about my Social Security benefit amount for 2023?
The Social Security Administration issues a Social Security Benefit Statement either through mail or online in January, revealing the benefits received in the preceding year. The statement contains details crucial for your tax return, should you choose to file one. For additional insights on Social Security and the upcoming tax season, consider creating an online IRS account ahead of time.