To find out whether any of your benefits are taxable, compare the base amount for your filing status with the total of:
- One-half of your benefits, plus
- All your other income, including tax-exempt interest.
When making this comparison, do not reduce your other income by any exclusions for:
- Interest from qualified U.S. savings bonds,
- Employer-provided adoption benefits,
- Foreign earned income or foreign housing, or
- Income earned in American Samoa or Puerto Rico by bona fide residents.
Figuring total income.
To figure the total of one-half of your benefits plus your other income, use the worksheet later in this discussion. If the total is more than your
base amount, part of your benefits may be taxable.
If you are married and file a joint return for 2001, you and your spouse must combine your incomes and your benefits to figure whether any of your
combined benefits are taxable. Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of
your benefits are taxable.
If the only income you received during 2001 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits
generally are not taxable and you probably do not have to file a return. If you have income in addition to your benefits, you may have to file a
return even if none of your benefits are taxable.
Base amount.
Your base amount is:
- $25,000 if you are single, head of household, or qualifying widow(er),
- $25,000 if you are married filing separately and lived apart from your spouse for all of 2001,
- $32,000 if you are married filing jointly, or
- $-0- if you are married filing separately and lived with your spouse at any time during 2001.
Worksheet. You can use the following worksheet to figure the amount of income to compare with your base amount. This is a quick way to
check whether some of your benefits may be taxable.
| A. |
Write in the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full
amount of any lump-sum benefit payments received in 2001, for 2001 and earlier years. (If you received more than one form, combine the amounts from
box 5 and write in the total.) |
A. |
|
| Note. If the amount on line A is zero or less, stop here; none of your benefits are
taxable this year. |
| B. |
Enter one-half of the amount on line A |
B. |
|
| C. |
Add your taxable pensions, wages, interest, dividends, and other taxable income and write in the total
|
C. |
|
| D. |
Write in any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from
income (listed earlier). |
D. |
|
| E. |
Add lines B, C, and D and write in the total |
E. |
|
| Note. Compare the amount on line E to your base amount for your
filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable
this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You then need to
complete Worksheet 1 in Publication 915
(or in your tax form instruction booklet). |
Example.
You and your spouse (both over 65) are filing a joint return for 2001, and you both received social security benefits during the year. In January
2002, you received a Form SSA-1099 showing net benefits of $6,600 in box 5. Your spouse received a Form SSA-1099 showing net benefits of
$2,400 in box 5. You also received a taxable pension of $17,000 and interest income of $500. You did not have any tax-exempt interest income. Your
benefits are not taxable for 2001 because your income, as figured in the following worksheet, is not more than your base amount ($32,000)
for married filing jointly.
Even though none of your benefits are taxable, you must file a return for 2001 because your taxable gross income ($17,500) exceeds the minimum
filing requirement amount for your filing status.
| A. |
Write in the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full
amount of any lump-sum benefit payments received in 2001, for 2001 and earlier years. (If you received more than one form, combine the amounts from
box 5 and write in the total.) |
A. |
$ 9,000 |
| Note. If the amount on line A is zero or less, stop here; none of your benefits are
taxable this year. |
| B. |
Enter one-half of the amount on line A |
B. |
4,500 |
| C. |
Add your taxable pensions, wages, interest, dividends, and other taxable income and write in the total
|
C. |
17,500 |
| D. |
Write in any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from
income (listed earlier). |
D. |
-0- |
| E. |
Add lines B, C, and D and write in the total |
E. |
$22,000 |
| Note. Compare the amount on line E to your base amount for your
filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable
this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You then need to
complete Worksheet 1 in Publication 915
(or in your tax form instruction booklet). |
Who is taxed.
The person who has the legal right to receive the benefits must determine whether the benefits are taxable. For example, if you and your child
receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are
taxable to you. One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are
taxable to your child.
Repayment of benefits.
Any repayment of benefits you made during 2001 must be subtracted from the gross benefits you received in 2001. It does not matter whether the
repayment was for a benefit you received in 2001 or in an earlier year. If you repaid more than the gross benefits you received in 2001, see
Repayments More Than Gross Benefits, later.
Your gross benefits are shown in box 3 of Form SSA-1099 or RRB-1099. Your repayments are shown in box 4. The amount in box 5 shows your
net benefits for 2001 ( box 3 minus box 4). Use the amount in box 5 to figure whether any of your benefits are taxable.
Tax withholding and estimated tax.
You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement
benefits. If you choose to do this, you must complete a Form W-4V. For 2002, you can choose withholding at 7%, 10%, 15%, or 27% of your total
benefit payment.
If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the
year. For details, get Publication 505,
Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES.
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