It’s tax season, so many people are gathering documents and filling out forms to file. If you receive Social Security benefits, you might be wondering whether they’re taxable. At Espy, Metcalf & Espy, PC at Law, in Dothan, AL, attorneys often provide representation in Social Security disability and retirement benefits cases. They will give you the information you need about the effects of Social Security on your federal income taxes.
Social Security Benefits & Taxes: Answers to Frequently Asked Questions
Do All Recipients Pay Federal Income Tax on Their Social Security Benefits?
No. Usually, the only people who pay income tax on their Social Security benefits are those who receive substantial taxable income in addition to their benefits. Examples of this additional taxable income include interest, dividends, wages, and self-employment earnings. However, Internal Revenue Service rules state even individuals who must pay taxes on their benefits receive 15% tax-free.
How Do I Know I Have to Pay Taxes on My Benefits?
Form SSA-1099, the Social Security benefits statement, shows the total payment distributed to each recipient in the previous year. The Social Security Administration sends the documents to benefits recipients each January. When recipients prepare their federal income tax return, they use their statement to determine whether their benefits are taxable.
If My Benefits Are Taxed, Do I Have to Pay It All at Once?
No, you can have federal taxes withheld from your Social Security benefits payments or make estimated tax payments to the IRS every three months.
The Social Security disability and asset protection attorneys at Espy, Metcalf & Espy, PC at Law understand the value of Social Security benefits. You can count on them to be strong advocates who empower you to receive all the payments you’ve earned. Call (334) 793-6288 to schedule a consultation, and visit the firm online for more information about their practice areas, including Chapter 13 and Chapter 7 bankruptcy. Check their Twitter and Facebook accounts for more news from the law firm.