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Pub. 915, Social Security and Equivalent Railroad Retirement Benefits 2004 Tax Year

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This is archived information that pertains only to the 2004 Tax Year. If you
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Table of Contents

Are Any of Your Benefits Taxable?

To find out whether any of your benefits may be taxable, compare the base amount (explained later) for your filing status with the total of:

  1. One-half of your benefits, plus

  2. 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 by bona fide residents of American Samoa or Puerto Rico.

Tip
The SSA issues Form SSA-1099 and Form SSA-1042S. The RRB issues Form RRB-1099 and Form RRB-1042S. These forms (tax statements) report the amounts paid and repaid, and taxes withheld for a tax year. You may receive more than one of these forms for the same tax year. You should add the amounts shown on all forms you receive from the SSA and/or RRB for the same tax year to determine the “total” amounts paid and repaid, and taxes withheld for that tax year. See Appendix, at the end of this publication for more information.

Each original Form RRB-1099 is valid unless it has been corrected. The RRB will issue a corrected Form RRB-1099 if there is an error in the original. A corrected Form RRB-1099 is indicated as “CORRECTED” and replaces the corresponding original Form RRB-1099. You must use the latest corrected Form RRB-1099 you received and any original Form RRB-1099 that the RRB has not corrected when you determine what amounts to report on your tax return.

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 2004, 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.

Tip
If the only income you received during 2004 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 2004,

  • $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 2004.

Worksheet.   
Worksheet you may need to fill in
 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 2004, for 2004 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, shown later.
 

Example.

You and your spouse (both over 65) are filing a joint return for 2004 and you both received social security benefits during the year. In January 2005, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. You also received a taxable pension of $19,000 and interest income of $500. You did not have any tax-exempt interest income. Your benefits are not taxable for 2004 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 2004 because your taxable gross income ($19,500) 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 2004, for 2004 and earlier years. (If you received more than one form, combine the amounts from box 5 and write in the total.) A. $11,000
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. 5,500
C. Add your taxable pensions, wages, interest, dividends, and other taxable income and write in the total C. 19,500
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. $25,000
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, shown later.

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 2004 must be subtracted from the gross benefits you received in 2004. It does not matter whether the repayment was for a benefit you received in 2004 or in an earlier year. If you repaid more than the gross benefits you received in 2004, see Repayments More Than Gross Benefits, later.

  Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Your repayments are shown in box 4. The amount in box 5 shows your net benefits for 2004 (box 3 minus box 4). Use the amount in box 5 to figure whether any of your benefits are taxable.

Example.

In 2003, you received $3,000 in social security benefits, and in 2004 you received $2,700. In March 2004, SSA notified you that you should have received only $2,500 in benefits in 2003. During 2004, you repaid $500 to SSA. The Form SSA-1099 you received for 2004 shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment). The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500).

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. You can choose withholding at 7%, 10%, 15%, or 25% 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 or the instructions for Form 1040-ES.

U.S. citizens residing abroad.   U.S. citizens who reside in the following countries are exempt from U.S. tax on their benefits.

  • Canada.

  • Egypt.

  • Germany.

  • Ireland.

  • Israel.

  • Italy. (You must also be a citizen of Italy for the exemption to apply.)

  • Romania.

  • United Kingdom (new treaty).

  The SSA will not withhold U.S. tax from your benefits if you are a U.S. citizen.

  The RRB will withhold U.S. tax from your benefits unless you file Form RRB-1001, Nonresident Questionnaire, with the RRB to provide citizenship and residency information. If you do not file Form RRB-1001, the RRB will consider you a nonresident alien and withhold tax from your railroad retirement benefits at a 30% rate. Contact the RRB to get this form.

Lawful permanent residents.   For U.S. income tax purposes, lawful permanent residents (green card holders) are considered resident aliens until their lawful permanent resident status under the immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Social security benefits paid to a green card holder are not subject to 30% withholding. If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center, Philadelphia, PA 19255 to determine if you are entitled to a refund. You must also attach the following information to your Form 1040 or 1040A:

  • A copy of the Form SSA-1042S, Social Security Benefit Statement,

  • A copy of the “green card,” and

  • A signed declaration that includes the following statements:

  The SSA should not have withheld federal income tax from my social security benefits because I am a U.S. lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. I am filing a U.S. income tax return for the tax year as a resident alien reporting all of my worldwide income. I have not claimed benefits for the tax year under an income tax treaty as a nonresident alien.

Nonresident aliens.   A nonresident alien is an individual who is not a citizen or resident of the United States. If you are a nonresident alien, the rules discussed in this publication do not apply to you. Instead, 85% of your benefits are taxed at a 30% rate, unless exempt (or subject to a lower rate) by treaty. You will receive a Form SSA-1042S or Form RRB-1042S showing the amount of your benefits. These forms will also show the tax rate and the amount of tax withheld from your benefits.

  Under tax treaties with the following countries, residents of these countries are exempt from U.S. tax on their benefits.

  • Canada.

  • Egypt.

  • Germany.

  • Ireland.

  • Israel.

  • Italy.

  • Japan.

  • Romania.

  • United Kingdom.

  Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from U.S. tax if the benefits are for services performed for the United States, its subdivisions, or local government authorities.

  If you are a resident of Switzerland, your total benefit amount will be taxed at a 15% rate.

  For more information on whether you are a nonresident alien, get Publication 519, U.S. Tax Guide for Aliens.

Exemption from withholding.   If your social security benefits are exempt from tax because you are a resident of one of the treaty countries listed, the SSA will not withhold U.S. tax from your benefits.

  If your railroad retirement benefits are exempt from tax because you are a resident of one of the treaty countries listed, you can claim an exemption from withholding by filing Form RRB-1001 with the RRB. Contact the RRB to get this form.

Canadian or German social security benefits paid to U.S. residents.   Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under the social security legislation of the United States. If you receive social security benefits from Canada or Germany, include them on line 1 of Worksheet 1, shown later.

How To Report Your Benefits

If part of your benefits are taxable, you must use Form 1040 or Form 1040A. You cannot use Form 1040EZ.

Reporting on Form 1040.   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. If you are married filing separately and you lived apart from your spouse for all of 2004, also enter “D” to the right of the word “benefits” on line 20a.

Reporting on Form 1040A.   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. If you are married filing separately and you lived apart from your spouse for all of 2004, also enter “D” to the right of the word “benefits” on line 14a.

Benefits not taxable.   If none of your benefits are taxable, do not report any of them on your tax return. But if you are married filing separately and you lived apart from your spouse for all of 2004, make the following entries. On Form 1040, enter “D” to the right of the word “benefits” on line 20a and “-0-” on line 20b. On Form 1040A, enter “D” to the right of the word “benefits” on line 14a and “-0-” on line 14b.

How Much Is Taxable?

If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Generally, the higher that total amount, the greater the taxable part of your benefits.

Maximum taxable part.   Generally, up to 50% of your benefits will be taxable. However, up to 85% of your benefits can be taxable if either of the following situations applies to you.

  1. The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly).

  2. You are married filing separately and lived with your spouse at any time during 2004.

Which worksheet to use.   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. You can use either that worksheet or Worksheet 1 in this publication, unless any of the following situations applies to you.

  1. You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. In this situation you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits.

  2. Situation (1) does not apply and you take an exclusion for interest from qualified U.S. savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. In this situation, you must use Worksheet 1 in this publication to figure your taxable benefits.

  3. You received a lump-sum payment for an earlier year. In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in this publication. See Lump-Sum Election, later.

Examples

The following pages contain a few examples you can use as a guide to figure the taxable part of your benefits.

Example 1.
  George White is single and files Form 1040 for 2004. In addition to receiving social security payments, he received a fully taxable pension of $18,600, wages from a part-time job of $9,400, and taxable interest income of $990, for a total of $28,990. He received a Form SSA-1099 in January 2005 that shows his net social security benefits of $5,980 in box 5.
To figure his taxable benefits, George completes Worksheet 1, shown below. On line 20a of his Form 1040, George
enters his net benefits of $5,980. On line 20b, he enters his taxable benefits of $2,990.

Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records

Before you begin: Is your filing status Married filing separately?      
Keep for your records
    
      No.Go to line 1 below.    
      Yes.Did you live apart from your spouse all year?    
      No.Go to line 1 below.
      Yes.Do the following if you file:
      Form 1040: Enter “D” to the right of the word “benefits” on line 20a, then go to line 1 below.
      Form 1040A:Enter “D” to the right of the word “benefits” on line 14a, then go to line 1 below.
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 1. $5,980        
  Note:If line 1 is zero or less, stop here; none of your benefits are taxable. Otherwise, go to line 2.        
2. Enter one-half of line 1 2. 2,990    
3. Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 8b, 9a, 10-14, 15b, 16b, 17-19, and 21
Form 1040A: Lines 7, 8a, 8b, 9a, 10, 11b, 12b, and 13 		3. 28,990    
4. Form 1040 filers: Enter the total of any exclusions/adjustments for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

  • Foreign earned income or housing (Form 2555, lines 43 and 48, or Form 2555-EZ, line 18), and

  • Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico

Form 1040A filers: Enter the total of any exclusions for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

 4. -0-    
5. Add lines 2, 3, and 4 5. 31,980    
6. Form 1040 filers: Enter the amount from Form 1040, line 35, minus any amounts on Form 1040, lines 26 and 27. Form 1040A filers: Enter the amount from Form 1040A, line 20, minus any amounts on Form 1040A, lines 18 and 19 6. -0-    
7. Is the amount on line 6 less than the amount on line 5?        
    No.
stop, non of your benefits are taxable
 None of your social security benefits are taxable.        
    Yes. Subtract line 6 from line 5 7. 31,980    
8. If you are:

  • Married filing jointly, enter $32,000

  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004, enter $25,000

8. 25,000    
  Note: If you are married filing separately and you lived with your spouse at any time in 2004, skip lines 8 through 15; multiply line 7 by 85% (.85) and enter the result on line 16. Then go to line 17.        
9. Is the amount on line 8 less than the amount on line 7?        
    No.
stop, non of your benefits are taxable
 None of your benefits are taxable. Do not enter any amounts on Form 1040, line 20a or 20b, or on Form 1040A, line 14a or 14b. But if you are married filing separately and you lived apart from your spouse for all of 2004, enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b.        
    Yes. Subtract line 8 from line 7 9. 6,980    
10. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004 10. 9,000    
11. Subtract line 10 from line 9. If zero or less, enter -0-. 11. -0-    
12. Enter the smaller of line 9 or line 10 12. 6,980    
13. Enter one-half of line 12 13. 3,490    
14. Enter the smaller of line 2 or line 13 14. 2,990    
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0- 15. -0-    
16. Add lines 14 and 15 16. 2,990    
17. Multiply line 1 by 85% (.85) 17. 5,083    
18. Taxable benefits. Enter the smaller of line 16 or line 17 18. $2,990    
 

  • Enter the amount from line 1 above on Form 1040, line 20a, or on Form 1040A, line 14a.

  • Enter the amount from line 18 above on Form 1040, line 20b, or on Form 1040A, line 14b.

        
  Note:If you received a lump-sum payment in this year that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see whether you can report a lower taxable benefit.        

Example 2.
  Ray and Alice Hopkins file a joint return on Form 1040A for 2004. Ray is retired and received a fully taxable pension of $15,500. He also received social security benefits and his Form SSA-1099 for 2004 shows net benefits of $5,600 in box 5. Alice worked during the year and had wages of $14,000. She made a deductible payment to her IRA account of $1,000. Ray and Alice have two savings accounts with a total of $250 in interest income. They complete Worksheet 1 (below) and find that none of Ray's benefits are taxable. They leave lines 14a and 14b of their Form 1040A blank.

Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records

Before you begin: Is your filing status Married filing separately?      
Keep for your records
    
      No.Go to line 1 below.    
      Yes.Did you live apart from your spouse all year?    
      No.Go to line 1 below.
      Yes.Do the following if you file:
      Form 1040: Enter “D” to the right of the word “benefits” on line 20a, then go to line 1 below.
      Form 1040A:Enter “D” to the right of the word “benefits” on line 14a, then go to line 1 below.
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 1. $5,600        
  Note:If line 1 is zero or less, stop here; none of your benefits are taxable. Otherwise, go to line 2.        
2. Enter one-half of line 1 2. 2,800    
3. Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 8b, 9a, 10-14, 15b, 16b, 17-19, and 21
Form 1040A: Lines 7, 8a, 8b, 9a, 10, 11b, 12b, and 13 		3. 29,750    
4. Form 1040 filers: Enter the total of any exclusions/adjustments for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

  • Foreign earned income or housing (Form 2555, lines 43 and 48, or Form 2555-EZ, line 18), and

  • Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico

Form 1040A filers: Enter the total of any exclusions for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

 4. -0-    
5. Add lines 2, 3, and 4 5. 32,550    
6. Form 1040 filers: Enter the amount from Form 1040, line 35, minus any amounts on Form 1040, lines 26 and 27. Form 1040A filers: Enter the amount from Form 1040A, line 20, minus any amounts on Form 1040A, lines 18 and 19 6. 1,000    
7. Is the amount on line 6 less than the amount on line 5?        
    No.
stop, non of your benefits are taxable
 None of your social security benefits are taxable.        
    Yes. Subtract line 6 from line 5 7. 31,550    
8. If you are:

  • Married filing jointly, enter $32,000

  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004, enter $25,000

8. 32,000    
  Note: If you are married filing separately and you lived with your spouse at any time in 2004, skip lines 8 through 15; multiply line 7 by 85% (.85) and enter the result on line 16. Then go to line 17.        
9. Is the amount on line 8 less than the amount on line 7?        
    No.
stop, non of your benefits are taxable
 None of your benefits are taxable. Do not enter any amounts on Form 1040, line 20a or 20b, or on Form 1040A, line 14a or 14b. But if you are married filing separately and you lived apart from your spouse for all of 2004, enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b.        
    Yes. Subtract line 8 from line 7 9.      
10. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004 10.      
11. Subtract line 10 from line 9. If zero or less, enter -0-. 11.      
12. Enter the smaller of line 9 or line 10 12.      
13. Enter one-half of line 12 13.      
14. Enter the smaller of line 2 or line 13 14.      
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0- 15.      
16. Add lines 14 and 15 16.      
17. Multiply line 1 by 85% (.85) 17.      
18. Taxable benefits. Enter the smaller of line 16 or line 17 18.      
 

  • Enter the amount from line 1 above on Form 1040, line 20a, or on Form 1040A, line 14a.

  • Enter the amount from line 18 above on Form 1040, line 20b, or on Form 1040A, line 14b.

        
  Note:If you received a lump-sum payment in this year that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see whether you can report a lower taxable benefit.        

Example 3.
  Joe and Betty Johnson file a joint return on Form 1040 for 2004. Joe is a retired railroad worker and in 2004 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Joe's Form RRB-1099 shows $10,000 in box 5. Betty is a retired government worker and received a fully taxable pension of $38,000. They had $2,300 in interest income plus interest of $200 on a qualified U.S. savings bond. The savings bond interest qualified for the exclusion. Thus, they have a total income of $40,300 ($38,000 + $2,300). They figure their taxable benefits by completing Worksheet 1 below. More than 50% of Joe's net benefits are taxable because the income on line 7 of the worksheet ($45,500) is more than $44,000. (See Maximum taxable part under How Much Is Taxable earlier.) Joe and Betty enter $10,000 on line 20a, Form 1040, and $6,275 on line 20b, Form 1040.

Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records

Before you begin: Is your filing status Married filing separately?      
Keep for your records
    
      No.Go to line 1 below.    
      Yes.Did you live apart from your spouse all year?    
      No.Go to line 1 below.
      Yes.Do the following if you file:
      Form 1040: Enter “D” to the right of the word “benefits” on line 20a, then go to line 1 below.
      Form 1040A:Enter “D” to the right of the word “benefits” on line 14a, then go to line 1 below.
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 1. $10,000        
  Note:If line 1 is zero or less, stop here; none of your benefits are taxable. Otherwise, go to line 2.        
2. Enter one-half of line 1 2. 5,000    
3. Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 8b, 9a, 10-14, 15b, 16b, 17-19, and 21
Form 1040A: Lines 7, 8a, 8b, 9a, 10, 11b, 12b, and 13 		3. 40,300    
4. Form 1040 filers: Enter the total of any exclusions/adjustments for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

  • Foreign earned income or housing (Form 2555, lines 43 and 48, or Form 2555-EZ, line 18), and

  • Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico

Form 1040A filers: Enter the total of any exclusions for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

 4. 200    
5. Add lines 2, 3, and 4 5. 45,500    
6. Form 1040 filers: Enter the amount from Form 1040, line 35, minus any amounts on Form 1040, lines 26 and 27. Form 1040A filers: Enter the amount from Form 1040A, line 20, minus any amounts on Form 1040A, lines 18 and 19 6. -0-    
7. Is the amount on line 6 less than the amount on line 5?        
    No.
stop, non of your benefits are taxable
 None of your social security benefits are taxable.        
    Yes. Subtract line 6 from line 5 7. 45,500    
8. If you are:

  • Married filing jointly, enter $32,000

  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004, enter $25,000

8. 32,000    
  Note: If you are married filing separately and you lived with your spouse at any time in 2004, skip lines 8 through 15; multiply line 7 by 85% (.85) and enter the result on line 16. Then go to line 17.        
9. Is the amount on line 8 less than the amount on line 7?        
    No.
stop, non of your benefits are taxable
 None of your benefits are taxable. Do not enter any amounts on Form 1040, line 20a or 20b, or on Form 1040A, line 14a or 14b. But if you are married filing separately and you lived apart from your spouse for all of 2004, enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b.        
    Yes. Subtract line 8 from line 7 9. 13,500    
10. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004 10. 12,000    
11. Subtract line 10 from line 9. If zero or less, enter -0-. 11. 1,500    
12. Enter the smaller of line 9 or line 10 12. 12,000    
13. Enter one-half of line 12 13. 6,000    
14. Enter the smaller of line 2 or line 13 14. 5,000    
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0- 15. 1,275    
16. Add lines 14 and 15 16. 6,275    
17. Multiply line 1 by 85% (.85) 17. 8,500    
18. Taxable benefits. Enter the smaller of line 16 or line 17 18. $6,275    
 

  • Enter the amount from line 1 above on Form 1040, line 20a, or on Form 1040A, line 14a.

  • Enter the amount from line 18 above on Form 1040, line 20b, or on Form 1040A, line 14b.

        
  Note:If you received a lump-sum payment in this year that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see whether you can report a lower taxable benefit.        

Example 4.
  Bill and Eileen Jones are married and live together, but file separate Form 1040 returns for 2004. Bill earned $8,000 during 2004. The only other income he had for the year was $4,000 net social security benefits (box 5 of his Form SSA-1099). Bill figures his taxable benefits by completing Worksheet 1 below. He must include 85% of his social security benefits in his taxable income because he is married filing separately and lived with his spouse during 2004. See How Much Is Taxable earlier.

Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records

Before you begin: Is your filing status Married filing separately?      
Keep for your records
    
      No.Go to line 1 below.    
      Yes.Did you live apart from your spouse all year?    
      No.Go to line 1 below.
      Yes.Do the following if you file:
      Form 1040: Enter “D” to the right of the word “benefits” on line 20a, then go to line 1 below.
      Form 1040A:Enter “D” to the right of the word “benefits” on line 14a, then go to line 1 below.
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 1. $4,000        
  Note:If line 1 is zero or less, stop here; none of your benefits are taxable. Otherwise, go to line 2.        
2. Enter one-half of line 1 2. 2,000    
3. Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 8b, 9a, 10-14, 15b, 16b, 17-19, and 21
Form 1040A: Lines 7, 8a, 8b, 9a, 10, 11b, 12b, and 13 		3. 8,000    
4. Form 1040 filers: Enter the total of any exclusions/adjustments for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

  • Foreign earned income or housing (Form 2555, lines 43 and 48, or Form 2555-EZ, line 18), and

  • Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico

Form 1040A filers: Enter the total of any exclusions for:

  • Qualified U.S. savings bond interest (Form 8815, line 14)

  • Adoption benefits (Form 8839, line 30)

 4. -0-    
5. Add lines 2, 3, and 4 5. 10,000    
6. Form 1040 filers: Enter the amount from Form 1040, line 35, minus any amounts on Form 1040, lines 26 and 27. Form 1040A filers: Enter the amount from Form 1040A, line 20, minus any amounts on Form 1040A, lines 18 and 19 6. -0-    
7. Is the amount on line 6 less than the amount on line 5?        
    No.
stop, non of your benefits are taxable
 None of your social security benefits are taxable.        
    Yes. Subtract line 6 from line 5 7. 10,000    
8. If you are:

  • Married filing jointly, enter $32,000

  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004, enter $25,000

8.      
  Note: If you are married filing separately and you lived with your spouse at any time in 2004, skip lines 8 through 15; multiply line 7 by 85% (.85) and enter the result on line 16. Then go to line 17.        
9. Is the amount on line 8 less than the amount on line 7?        
    No.
stop, non of your benefits are taxable
 None of your benefits are taxable. Do not enter any amounts on Form 1040, line 20a or 20b, or on Form 1040A, line 14a or 14b. But if you are married filing separately and you lived apart from your spouse for all of 2004, enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b.        
    Yes. Subtract line 8 from line 7 9.      
10. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2004 10.      
11. Subtract line 10 from line 9. If zero or less, enter -0-. 11.      
12. Enter the smaller of line 9 or line 10 12.      
13. Enter one-half of line 12 13.      
14. Enter the smaller of line 2 or line 13 14.      
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0- 15.      
16. Add lines 14 and 15 16. 8,500    
17. Multiply line 1 by 85% (.85) 17. 3,400    <