Even though a person has stopped working full time, it doesn't mean that they have fewer details to pay attention to at tax filing time. For example, those who are receiving Social Security benefits are advised to consult with a tax preparer to help maximize their returns.
According to a recent reminder from the Internal Revenue Service, the amount of Social Security benefits considered to be taxable will depend heavily on an individual's income and marital status. For example, those who depended on Social Security benefits as their primary income in the past tax year will typically find that those funds are not taxable and may not even need to file a return.
However, those who work part time or have other sources of income will find their earnings taxable beyond a certain base level in any given year.
The IRS notes that for 2009, that base amount was $32,000 for married couples who file jointly, and $25,000 for individuals.
To determine whether they have a tax obligation, people can compare the sum of one-half of their Social Security benefits with all of their income from the previous tax year.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.