Social Security Benefits

Robert D. Cavanaugh, CLU asked:


Up to 85% of your Social Security retirement benefits may be taxable. Here’s how to find out how much is taxable and what you can do to reduce or eliminate any tax.

Of all the financial issues surrounding being a senior, the one that tops the list in terms of anger is the fact that, depending on the situation, Social Security retirement benefits are taxable. My experience indicates that some seniors are completely unaware of this fact. I have also had to sit and listen to the ranting of those who are aware. It goes something like this: “I already paid tax on the earnings during my working years. The Social Security withdrawn from my income each pay check was a tax. This sounds like a tax on a tax.” And on and on…

After letting the person blow off some steam, my response typically was, “Hey, don’t shoot the messenger! I’m here to see if any of your Social Security benefits are taxed, if so, how much and what we can do to reduce or eliminate that tax.” So let me take you through the first part of our conversation.

Whether or not you are taxed depends on:

1. The amount of your income.

2. Whether or not you have income from sources other than Social Security.

The amount of your tax depends on:

1. Your marital filing status: single or married.

2. The amount of your income.

The tax on Social Security retirement benefits was put into effect in 1983. Tax was applied on up to 50% of benefits. In 1993 this was increased to 85%. Here’s how the calculation goes…

The first step is to calculate your “provisional income”. So grab last year’s tax return.

1. Subtract your taxable S.S. benefits (line 20b) from your Adjust Gross Income (line 37).

2. Add one half of your total S.S. benefits (line 20a).

3. Add any tax exempt interest (line 8b).

4. The result is your “provisional income”.

Once you know this number, you can apply the rules to determine how much of your S.S. is taxed. Again, this depends on whether you are married or single and the amount of your income.

Let’s look first at a married couple filing jointly. Here is the math…

1. If your provisional income is below $32,000, you don’t have a problem.

2. For provisional income over $32,000:

a. Take the provisional income between $32,000 and $44,000 and divide it by two.

b. If your provisional income is above $44,000, take the total provisional income, subtract $44,000 and multiply by 0.85.

c. Add 2a and 2b.

d. Multiply your total S.S. benefits (line 20a) by 0.85.

e. The lesser of your result on 2c and 2e above is the amount of your S.S. benefit taxed.

Now let’s look at the calculation for a single person…

1. If your provisional income is below $25,000, none of your S.S. benefits are taxable.

2. For provisional incomes over $25,000:

a. Take the provisional income between $34,000 and $25,000 and divide it by two.

b. If your provisional income is above $34,000, subtract $34,000 from your total provisional income and multiply by 0.85.

c. Add 2a and 2b.

d. Multiply your total S.S. benefit (line 20) by 0.85.

e. The lesser of your result on 2c and 2d above is the amount of your S.S. benefit taxed.

Now that you know whether or not any of your Social Security benefits are taxable, and if so, how much, the next step is to take a look at the ways you can reduce or eliminate this tax. In general, there are three solution categories:

1. Reduce your interest income. The most common is interest on CDs.

2. Reduce your dividend income.

3. Reduce your tax exempt interest income.

Note: The calculations above use a very simplified approach. Your situation may have other factors that would affect the math. It is strongly advised that you consult with a qualified tax professional.



Leo

ravineboy18 asked:


I need proof of my Social Security benefits that I recieve each month, and I would like to know if I can go to Social Security on line and get a print out of it.

Leo

hellfreezeover666 asked:


My parents are thinking about moving to Arizona after their retirement. They been working and paying social security benefits in California for the last few decades. Now they’re trying to find out if there’s any difference in retirement benefits between California or Arizona. I heard that social security benefit based solely on the amount you contributed during your working life, not on where you live when you retire. Is that true? Is there any other potential benefit for retiring in California (other than weather or higher living cost)? Thank you very much.

Barry

Kevin G asked:


I have contributed to the Social Security system for over 20 years, and assuming there is still retirement benefits attached to Social Security by the time I come of age, will I be entitled to them if I have become a Canadian citizen?

Raymond

Troy W asked:


My father passed and had not filed taxes on his painting business for two years. My mother is unable to work and is filing for survivors benifits with the social security office. Will social security deny my mother benefits because of past due taxes. My mother is on the business as a 49% share holder and my father was the other. He did all the work and she stayed home because of a previous injury. She will be closing the business.

Lawrence

NewIntheCity asked:


I have worked in USA long enough to earn Social Security retirement benefits. But I plan to move back to Asia to retire. Would I still receive Social Security Benefits when I am at 67 from US government even I am in another country?
How about if I am not a US citizen and decide to leave the country?

Carlos

Mary Jean Kuda asked:


Beverly Hills is a city situated in the western part of Los Angeles County, California. It is entirely surrounded by the city of Los Angeles together with the neighboring city of West Hollywood. It is bordered on the north by Bel-Air and the Santa Monica Mountains, on the east by West Hollywood, the Carthay neighborhood of Los Angeles, and the Fairfax District of Los Angeles, and on the south by the Beverlywood.

 

It contains some of the largest homes in Los Angeles County and the nation. These homes range from the extravagant and luxurious in dimension, to the more elegant and modern homes, and then to the many small duplex rental units and disconnected homes with less than 3,000 sq ft. The area’s "Platinum Triangle" of wealthy neighborhoods is established by Beverly Hills and the Los Angeles neighborhoods of Bel-Air and Holmby Hills. According to the recent census, it has a population of 34,980.

 

Despite the luxurious and extravagant living, Beverly Hills residents still utilize their Social Security benefits and ideally with the assistance of Beverly Hills Social Security Lawyers.

 

Benefits of Hiring a Social Security Lawyer

The law does not mandate that applicant must hire a lawyer before claims can be approved. Although applying for the benefits may be done with or without the guidance of a lawyer, the difference is that when done on your own, the process may take a while. On the other hand, when done with lawyer’s help, there is a higher percentage of success. It will also expedite the claim process.

 

The necessity of having a lawyer is beneficial from the fact that many claims filed before the Social Security Administration are rejected annually due to any of the following reasons:

 



Insufficiency of information

Incomplete medical report

Lack of a valid claim



 

What to do in Case of Denial of Claim

If you prefer to apply alone and your initial claim is denied, this will demand the appearance of a qualified lawyer who can provide representation and help you pursue your claim through appeal.

 

In case of denial, any of the following remedy may be undertaken depending on what stage you are in.

 

· Appeal within 60 days from receipt of letter of denial.

· Move for a motion for reconsideration.

· If decision of the judge is not favorable, file an appeal to the Commission.

 

Benefits Received in Case of Approval

Social Security, as the name implies, provides assistance in case of disability, death or old age. Its objective is to provide retirement, survivors and disability insurance benefits to workers and their families who are residing in the United States of America. It guarantees economic stability that keeps them out of poverty.

 

It is worth mentioning at this point that the system provides for the following benefits:

 



Survivors insurance

Retirement insurance

Disability insurance

veterans benefits

unemployment insurance

food stamps



 

Indeed, what hinders claimants from enjoying the benefits under the system is the lengthy and complicated process of claim settlement. The effective way of dealing with this is to acquire the services of a lawyer as soon as possible.

 

To help you with matters regarding disability and other social security issues, you can consult with our experienced http://www.mesrianilaw.com/Disability-Lawyers.html> disability lawyers who can assist you in claiming your social security disability benefits. Get in touch with our expert Los Angeles lawyers by logging on to our website and have your claim evaluated.

 



Tara

MAC asked:


My son is receiving social security benefits because his father was killed five years ago on a motorcycle. I have remarried and my husband would like to adopt my son. Will this affect my son’s social security benefits?

Clinton

Enlightenme! asked:


I am ignorant regarding social security benefits since I am still pretty young.

So I am asking a basic question, what are they and how important are they to have later in life?

Additionally, if I was to work abroad with a foreign employer can I still qualify for it later or would I have to work for a US employer?

Judy

moham asked:


I am retired , and get a pension, I also have some credits toward social security , but not enough to recieve benefits.

If my employer pay into social security , will I then qualify ?

Marlene