What If You Exceed Social Security Earnings Limit?
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If you turned 64 in 2015 and collected retirement benefits and worked $31 over the limit allowed, how much money are you taxed on ? What is the Social Security earnings limit?
— Annie iStock.com/heebyj
Exceeding the Social Security earnings limit may result in taxes and, depending on your age, could also result in cut benefits. The taxability of Social Security benefits is a function of your IRS filing status and your “combined income.” The IRS has a work sheet in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits, that goes through 19 steps to calculate your taxable benefits.Here is a summary of that process: If your filing status is individual and your combined income is between $25,000 and $34,000, you could end up paying taxes on up to 50% of your Social Security benefit. If it is more than $34,000, up to 85% could be taxable. The rules are different if you file a joint return with your spouse. If you have a combined income between $32,000 and $44,000, you could end up paying taxes on up to 50% of your benefits. If your income exceeds $44,000, up to 85% of your benefits could be taxable. If you are married filing separately, it is a little more complicated and you could end up paying taxes on up to 85% of your benefit.
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— Annie iStock.com/heebyj
Exceeding the Social Security earnings limit may result in taxes and, depending on your age, could also result in cut benefits. The taxability of Social Security benefits is a function of your IRS filing status and your “combined income.” The IRS has a work sheet in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits, that goes through 19 steps to calculate your taxable benefits.Here is a summary of that process: If your filing status is individual and your combined income is between $25,000 and $34,000, you could end up paying taxes on up to 50% of your Social Security benefit. If it is more than $34,000, up to 85% could be taxable. The rules are different if you file a joint return with your spouse. If you have a combined income between $32,000 and $44,000, you could end up paying taxes on up to 50% of your benefits. If your income exceeds $44,000, up to 85% of your benefits could be taxable. If you are married filing separately, it is a little more complicated and you could end up paying taxes on up to 85% of your benefit.