Welcome Guest. Register Now!  


Social Security Social Security benefits and tax issues


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-03-2014, 08:58 PM
Junior Member
 
Join Date: Mar 2014
Posts: 3
Annuities and social security benefit taxation

I've been talking to an investment advisor and he made a statement that I'd like to verify because I think he's incorrect.

He says that if you have an annuity in an ira and start taking annuity payments, those amounts, while taxable as ordinary income (assuming all the ira funds were originally tax deferred), do not count in the calculation for whether your social security income is taxable. As far as I can find online it appears that it would count.

Do you have any tax experts that can verify who is correct.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 03-04-2014, 04:32 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by sirto11 View Post
I've been talking to an investment advisor and he made a statement that I'd like to verify because I think he's incorrect.

He says that if you have an annuity in an ira and start taking annuity payments, those amounts, while taxable as ordinary income (assuming all the ira funds were originally tax deferred), do not count in the calculation for whether your social security income is taxable. As far as I can find online it appears that it would count.

Do you have any tax experts that can verify who is correct.
he is correct.In general, Social Security benefits are not taxable to the recipient; however, depending on your marital status and the amount of money you make in a particular year, MAGI I mean, your benefits may become taxable. You can do the following quick computation to determine whether some of your benefits may be taxable: First, add one-half of the total Social Security benefits you received to all your other income, including any tax exempt interest and other exclusions from income.Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 03-04-2014, 03:49 PM
Junior Member
 
Join Date: Mar 2014
Posts: 3
Quote:
Originally Posted by Wnhough View Post
he is correct.In general, Social Security benefits are not taxable to the recipient; however, depending on your marital status and the amount of money you make in a particular year, MAGI I mean, your benefits may become taxable. You can do the following quick computation to determine whether some of your benefits may be taxable: First, add one-half of the total Social Security benefits you received to all your other income, including any tax exempt interest and other exclusions from income.Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.
Yes, I understand that but that isn't my question.

What I want to know is whether the annuity payments are they included in the MAGI. As far as I can find online it appears that they are. Can you refer me to anything on the internet that expressly states that annuity payments can effect the taxability of SS benefits?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #4 (permalink)  
Old 03-04-2014, 04:03 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by sirto11 View Post
Yes, I understand that but that isn't my question.

#1;What I want to know is whether the annuity payments are they included in the MAGI. As far as I can find online it appears that they are.



#2;Can you refer me to anything on the internet that expressly states that annuity payments can effect the taxability of SS benefits?
#1 as mentioned above, no
#2; i guess you can contact the IRS for more info in detail



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #5 (permalink)  
Old 03-04-2014, 04:05 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by sirto11 View Post
Yes, I understand that but that isn't my question.

What I want to know is whether the annuity payments are they included in the MAGI. As far as I can find online it appears that they are. Can you refer me to anything on the internet that expressly states that annuity payments can effect the taxability of SS benefits?
pleaxe visit the IRS website here;http://www.irs.gov/pub/irs-pdf/p915.pdf



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #6 (permalink)  
Old 03-04-2014, 04:34 PM
Junior Member
 
Join Date: Mar 2014
Posts: 3
Quote:
Originally Posted by Wnhough View Post
#1 as mentioned above, no
So, you are saying that although MAGI includes all your other income it doesn't include the annuity payments?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #7 (permalink)  
Old 03-04-2014, 05:01 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
MAGI(provisional income)=50% of soc sec benefits(annual total)+tax exempt income +excl foreign income;



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #8 (permalink)  
Old 03-05-2014, 07:52 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by sirto11 View Post
So, you are saying that although MAGI includes all your other income it doesn't include the annuity payments?
NOTE; if your pension( i guess also annuity) is taxable , then it needs to be included as income to calculate MAGI, provisional income, I mean



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Never had to pay tax on social security before. Why now? scrltlttr1 Social Security 1 01-29-2014 08:21 AM
Social Security and Supplemental Security Income (SSI) Benefits related taxpros For 2013 0 11-27-2013 03:30 PM
social security? tifyya Social Security 2 12-08-2011 03:08 AM
What is the typical average monthly Social Security benefit for a retired worker in ? TaxGuru Social Security 0 08-16-2008 01:18 PM
What is the maximum Social Security retirement benefit? TaxGuru Social Security 0 08-05-2008 04:26 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.