SS & Taxes

[tippyclubb]

My husband went to the SS office today and was told he will only be taxed on wages earned and would not be taxed on any investment interest, other than federal taxes. I am confused because according to the SS website it clearly states any interest earned is counted as income. Perhaps, I misinterpreted it.

Can someone clarify this for us?

[laceylady]

The SS office has no business giving out tax information. His income taxes are going to depend on his whole income including SS, investment income and wages. He will NOT pay Social Security Tax on his investment income if this is the type of tax you are referring to. Income tax questions should be directed to the IRS not SSA.

[jimmy D]

Not sure how everything works but why don't you ask SS to help you with the confusion since they gave him the info, Just seems the right thing to do

[rjm1cc]

My husband went to the SS office today and was told he will only be taxed on wages earned and would not be taxed on any investment interest, other than federal taxes. I am confused because according to the SS website it clearly states any interest earned is counted as income. Perhaps, I misinterpreted it.

Can someone clarify this for us?Probably a misunderstanding of terms.
My guess. No ss tax on interest. But when you calculate your income tax interest income can cause some SS to be subject to income tax.

[gomoho]

Buy a Turbo Tax program - it walks you through and does the calculations. Used it when I was self employed, now have rental properties and it is excellent - really easy.
Coach is right on with his explanation - you may be subject to taxes on some of your social security depending on your individual circumstances. I agree it is ridiculous to have to pay a tax on a tax, but that is our government at work - what can I say???

[manaboutown]

See IRS publication 915. Social Security Benefits and Your Taxes (http://www.irs.gov/uac/Newsroom/Social-Security-Benefits-and-Your-Taxes)

[tippyclubb]

Thanks everyone. We will be discussing SS with our tax accountant when we get our taxes done in a few weeks. I have a good understanding of SS from the reading I've done on SSA and the IRS website.

The big question I have is how much investment interest can one make while on SS without going into a higher tax bracket. Guess I'll find out the answer to that shortly.

[rjm1cc]

Thanks everyone. We will be discussing SS with our tax accountant when we get our taxes done in a few weeks. I have a good understanding of SS from the reading I've done on SSA and the IRS website.

The big question I have is how much investment interest can one make while on SS without going into a higher tax bracket. Guess I'll find out the answer to that shortly.

Remember you get to keep part of the investment income so I would try and maximize the cash in my pocket even if that meant I paid more in taxes also.