info from Jimbo’s show re taxation of social security benefits

Terry….
Caught you this morning on the Bohannon show, but need a little clarification.
What was it you said about taxes on social security income? I just turned 66 and know that this is when I can get close to max benefits(Ihaven’t taken any payments as of yet), but you also said something about taxes kicking in after a combined income of $44,000. Since your segment was on at about 3am in this market(Phoenix)I didn’t fully catch all you said(tee-hee—a bit of sleep took over).
Used to enjoy your segments on TV years ago in Chicago…..thanks for taking the time to answer me.-Don

Terry Says:  Thanks for staying up late to listen!  Here’s the info, direct from the SocialSecurity.gov website (specific link: http://www.socialsecurity.gov/planners/taxes.htm.  I’ve pasted the info below, and it’s something to keep in mind.  Do wait until you reach full retirement age at least to claim SS.  But you can go ahead and sign up for Medicare.  Read the column on that topic posted two weeks ago on my website.  Terry

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Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

• file a federal tax return as an “individual” and your combined income* is
  • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $34,000, up to 85 percent of your benefits may be taxable.
• file a joint return, and you and your spouse have a combined income* that is
  • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
  • more than $44,000, up to 85 percent of your benefits may be taxable.
• are married and file a separate tax return, you probably will pay taxes on your benefits.