{mosSender [email protected]}Are your Social Security benefits taxable? If your only income for the year was Social Security or Railroad Retirement benefits, those benefits w...
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Are your Social Security benefits taxable? If your only income for
the year was Social Security or Railroad Retirement benefits, those
benefits will generally not be taxed. However, since very few people
can survive on that amount of income, chances are you have other
sources that may result in your Social Security benefits being
partially taxed.
These are the steps for determining taxability:
• (1) Add up your total income. This includes interest and
dividend income, taxable pensions, other investment income, wages
from part-time or full-time work plus tax-exempt interest income,
excludable interest income from U.S. savings bonds, and excludable
foreign-earned income. (You will note the excludable items are not
normally taxable.) (You will also note you DO NOT include your Social
Security benefits.)
• (2) Decide what your base amount is (this is an arbitrary
amount, chosen, presumably by Congress), depending on your filing
status:
• $25,000 if single, head of household or qualifying widow(er).
• $25,000 if married, filing separately, and lived apart from
your spouse for all of 2005.
• $32,000 if married, filing jointly.
• (3) Add your income [calculated in (1)] plus half of your
Social Security benefits. If that total amount is more than your base
amount, some of your benefits will be taxable. Joint filers Take
note! If you are married and filing jointly, you must combine your
incomes and benefits to determine if your combined benefits are
taxable. This is true even if your spouse had no Social Security
benefits. If he/she had income, it must be added to "total income" to
see if you exceed your "base amount".
For more information go to the AMERICAN CITIZENS ABROAD website
www.aca.ch/cadtopit.htm
Andee Goldman
Israel Country Chair for
American Citizens Abroad
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