Some Villagers have complained they owe taxes on their 2024 return because more of their Social Security was taxable.
Beginning in 1984, if your total income is more than $25,000 (Single) or $32,000 (Joint), part of your SS benefits will be taxable. The most that will be taxed is 85 percent. This threshold of $25,000 or $32,000 is set by law and has not changed since 1984. Unlike many tax statutes, it is not inflation indexed.
Income for this law is defined as your adjusted gross income, nontaxable interest, and half of your SS benefits. Because of inflation, more taxpayers are having the full 85 percent of SS taxed.
Perhaps you are relying on withholding, from a pension or an IRA distribution, to cover your annual income taxes. If you are still short when you file, having taxes withheld from SS benefits can help you avoid a surprise when the next tax season arrives.
To have withholding from your SS payment, complete IRS Form W-4V, Voluntary Withholding Request, and submit it by mail to your local SS office at 6140 Cottle Road, San Jose, CA 95123. The form is available at www.irs.gov. Or stop by the SRS office if you would like the form printed for you.
You can choose a withholding rate of 7, 10, 12, or 22 percent.
You can change the percentage or stop withholding by completing and submitting a new W-4V.
If you do not want to withhold from your monthly SS benefit, you can make quarterly estimated tax payments to the IRS using Form 1040ES. When paying estimated taxes, you usually make four equal payments and follow the payment schedule on the tax forms.
Good news, California does not tax SS benefits.
Note: The Senior Resource Services (SRS) office hours for drop-in assistance are Monday, Wednesday, and Friday from 10 a.m. to noon. The SRS office is in the Cribari Center across from the Post Office. You may also leave a message at 408-239-5253. The purpose of SRS is to provide education and general business and financial information. All assistance is free and confidential. You should ask your professional advisor about your individual situation.
