Must I File a Tax Return for Social Security Income Under $25,000?

If you live entirely on Social Security, you rarely need to pay taxes or file a return. It's when you receive other income as well that your benefits can become prey for the taxman. Even if your benefits are well below $25,000, income from other sources may render them taxable and require you file a Social Security tax form.

TL;DR (Too Long; Didn't Read)

You'll need to pay taxes on your Social Security income if you made $25,000 or more during the tax year in question.

Filing Taxes on SSI

To find out if your benefits are taxable, you add up your adjusted gross income in the appropriate section of your 1040 form. Add any nontaxable interest you earned and then half your Social Security benefits for the year. If you think there's a good chance of paying taxes next year, you can ask the government to withhold some of your benefits. Fill out a W-4V form for voluntary withholding and request the government take out 7, 10, 15 or 25 percent of your benefit. Alternatively, you can make federal estimated tax payments – used by self-employed professionals as a substitute for withholding – every quarter. Either approach will save you from having to write a large check to the IRS next April.

Exceptions to Paying SSI Taxes

Strategically lowering your other income can keep your Social Security check out of the IRS's hands. Postponing moves that result in a spike in income is another option. For example, if at the end of the year you're close to the earnings cutoff, delaying profitable asset sales from December until January may keep your Social Security tax free. Even if your combined income falls below the cutoff, you have to file if your non-Social Security money is high enough to require it. You may want to file even if you don't have to. If you had taxes withheld or paid estimated tax, for example, filing a 1040 is the only way to get your refund. If you qualify for an Earned Income Tax Credit or any other credit, you can't claim it unless you file.

Changes for 2018 Taxes

Although the new tax laws don't change the earnings caps or anything else related to paying on Social Security income, if you're filing taxes while on Medicaid, you may want to pay attention to the cost-of-living adjustment. Starting in 2018, retirees will get a 2 percent increase, but rising Medicare premiums may cancel out any benefit you'd see.

Filing 2017 Taxes

If you're filing for 2017 or 2018, you'll need to pay close attention to the income requirements. You'll be required to file a tax return on Social Security income if you made $25,000 or more in overall earnings during the year. That increases to $32,000 for married couples filing jointly.

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