Page 18 - Senior Times South Central Michigan - March 2017 - 24-03
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Page 18
Senior Times - March 2017
Income Taxes and
105 Capital Ave., NE 269-962-5527
Social Security Benefits
By: Sherii Sherban, Publisher
The IRS requires you to file a
tax return when your gross income exceeds the sum of the standard deduction for your filing status plus one exemption amount. These filing rules still apply to senior citizens who are living on Social Security benefits. If you are a senior, however, you don't count your Social Security income as gross income. It may, however, be counted as part of “com- bined income,” which equals your adjusted gross income plus nontax- able interest plus 1⁄2 of your Social Security benefits.
If Social Security is your sole source of income, then you don't need to file a tax return.
When Seniors Must File for 2016:
• If you are unmarried and at least 65 years of age, then you must
file an income tax return if your gross income is $11,850 or more. However, if you live on Social Security benefits, you don't include this in gross income. If this is the only income you receive, then your gross income equals zero, and you don't have to file a federal income tax return.
• If you earn other income that is not tax-exempt, then each year you must determine whether the total exceeds $11,850.
• If you are married and file a joint return with a spouse who is also 65 or older, you must file a return if your combined gross income is
$23,100 or more. If your spouse is under 65 years old, then the thresh- old amount decreases to $21,850.
There are certain situations when seniors must include their Social Security benefits in gross income. This usually happens only if you have other substantial income 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 IRS rules.
If you:
File a federal tax return as an "individual" and
• Combined income is between
$25,000 and $34,000 – you may have to pay income tax on up to 50 percent of your benefits.
• Combined income is more than $34,000 – up to 85 percent of your benefits may be taxable.
File a joint return, and you and your spouse have
• Combined income is between
$32,000 and $44,000 – you may have to pay income tax on up to 50 percent of your benefits.
• Combined income is 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.
For more specific questions it is recommended to review IRS filing requirements, or consult with a tax professional.
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