Fed tax on social security + additional income?

[Jeff2387]

NV
My wife and I receive $22,000 in social security income (after medicare related expenses taken out). I'm contemplating some part time work to supplement the SS. Question: If I earn for example $5000 in a year, would my tax liability be on only the $5000, or it would be on $27,000? I haven't had to file income taxes since SS was our only income. So just wondering how any new non-SS income would effect federal tax. Thank you in advance.

 

[adjusterjack]

Non-SS income can make part of your SS benefits taxable but $5000 is not likely to reach the threshold.

You can get an idea of how it works by going back to the 2018 1040 instructions and run the calculations on the SS Benefits Worksheet on Page 33.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
By my reckoning $5000 would not make any of your SS taxable. Only the $5000 would be taxable but you wouldn't likely pay an tax at all due to the standard deduction for a married couple being $24,000 (more if either or both of you are over 65).

Using my own return as an example I collected $20635 in SS benefits and had taxable income of $19493.

Only $2405 of my SS benefit was taxable. Actual tax on that amount about $200. Not exactly painful.

You can plug in other amounts to see what your threshold is. You can make a lot more than $5000 and not pay any taxes at all. You would, however, be burdened with filing the tax returns. Not much of a burden. Took me all of 20 minutes to do the fed and my state.

If you do have earned income for 2019 also see if you qualify for the Earned Income Credit where the gummint pays you extra for not making too much money.

 

[Jeff2387]

I will check out the worksheet, thank you for the info!

 

[LdiJ]

I will check out the worksheet, thank you for the info!

The worksheet is great. However, I will tell you that if 1/2 of your combined SS benefits plus all of the rest of your other income is less than 33k, you will not pay any tax on your SS benefits.

 

[adjusterjack]

The worksheet is great.

It isn't great. It's a necessary evil.

 

[LdiJ]

It isn't great. It's a necessary evil.

LOL