When we start collecting our Social Security retirement benefit we might think that we don’t have to pay any more taxes to the IRS in the following years. And this could be true, but it all depends on the individual situation of each United States citizen. Each and every retirement check is individual, as are the Tax Returns.
Therefore, each Tax Return must be calculated individually. There are many factors that can change this, but one of the main ones is whether or not we have income outside of Social Security. The IRS will determine how much in taxes we must pay from the Combined Income. So if you have extra income, watch out because you may have to pay taxes directly in future years.
Regardless, most retirees with a Social Security check may not have to pay taxes to the IRS. And it is very common not to get other income, although it is not advisable to have Social Security as the only source of income. So we should always pay close attention to our annual Tax Return to avoid problems with taxes and the Internal Revenue Service.
What taxes do I have to pay to the IRS for Social Security?
As we have already mentioned, in most cases we will not have to pay taxes on the Social Security check. But if we have extra income, we do have to pay attention to the new IRS rules.
By taking into account our Combined Income, we will be able to know what taxes we will have to pay in the coming years. The Combined Income is the sum of half of the Social Security, the adjusted gross income and the nontaxable interest. Following this rule, we find the following:
- Social Security will have up to 85% taxable in the event that:
- The return is filed as an individual and the combined income is greater than $34,000.
- The return is filed jointly and your combined return and your spouse’s combined return is $44,000.
- On the other hand, Social Security may be taxable on up to 50% of the income if:
- The tax return carries in combined income between $25,000 and $34,000.
- The combined income tax return is between $32,000 and $44,000.
In case we are not entirely clear about what we have to do to file our taxes, remember that there are free tools for some groups of retirees. Likewise, an advisor could also help us to file our taxes in an easier way and thus avoid problems with taxes and with the IRS.
Remember that no matter what we do, if we have to pay taxes it is always a good idea to pay them as soon as possible. Delaying the payment of taxes can be a very bad situation for citizens. So make sure you send the IRS your Tax Refund in the best possible way and avoid all the problems that can arise from not sending the Tax Return on time.
In short, even if we apparently do not have to pay taxes because our income is low, either from Combined Income or just Social Security as a source of income, what we must do is to send the Tax Return on time. If we have done everything right, the IRS will confirm our situation and we will find that we will have to pay taxes or not depending on that tax return.