Social Security

[Tate]

Client received 40236.00 SS in 2009. $24041.00 was for 2008 and 2007. This is her only income. According to work sheet in Pub 17, half the amount is less than 25000.00 (her base amount). So am I correct that she does not have to file a tax return.

[dyne]

I believe that she is NOT required to file a return. I had a client who received slightly more
than $50,000 during one year. I did not bother to calculate the tax which would have been
owed in the prior years (which would have been ZERO) to use to limit the tax. I simply entered the $51,000 (etc) in my software for the year the benefits were received. She had NO other income so after taking HALF of the SS benefits would be $25,500 (etc) and only the EXCESS over $25,000 (for a single taxpayer) is taxable or about $250. Since her GROSS income for this purpose was only $250 or less than the requirement to file of $9000 (etc) for her year, she is NOT required to file. I filed for her anyway to get the Rebate but in your case your client is NOT required to file.That is my opinion.

[Tate]

Thanks so much for your opinion. This time of the year all opinions help.

[taxea]

It is 1/2 the SSB minus exemption and standard deduction.

[dyne]

One-half of the social security benefits plus ALL other income LESS the $25,000 exemption for a single taxpayer or $32,000 for a joint return or ZERO if married filing separately will provide the taxable portion of the social
security benefits to be reported on line 20a. Again add to this amount ALL other income to arrive at GROSS INCOME which is the amount used to determine if a tax return must be filed. This is GENERALLLY the amount
reported on line 22 of page 1 but there ARE exceptions such as gross rental income, gross business
income, etc which must also be included or subtracted.
Social Security benefits of up to $50,000 for a single taxpayer or $64,000 for a joint return are ONLY
taxable if OTHER income was received. If more than these amounts are received a portion of it will
be taxble.
Generally this GROSS INCOME amount minus the standard deduction or itemized deductions and minus the exemptions amount will equal the TAXABLE INCOME amount to be reported on line 43 of the tax return, but this amount is used to calculate the tax and has NOTHING to do with the filing requirements. Also there can be certain adjustments to arrive at the taxable income such as an IRA contribution deduction, etc.
There are other factors which might make it necessary or desirable to file a return also such
as was there any federal tax withheld or SE tax due or is a REFUND due because of
other refundable credits allowable.

[taxmom34]

best "down to earth explanation" i have heard. thanks

[ChEAr$]

Y'all have defined taxable income derived from SS benefits exactly of course, and there may
be no tax. But check definition of GROSS income re filing requirements.

[dyne]

Gross income is a complicated amount and I was not trying to explain every rule.
The person who submitted the first post had NO other income, therefore the
social security benefits in this case are NOT considered Gross Income and the
taxpayer would NOT be required to file a tax return. Gross social security benefits
are NOT GROSS income for federal tax purposes. Only the TAXABLE portion of
social security benefits are considered to be GROSS income.