Q:

How do you withhold income taxes from Social Security benefits?

A:

Quick Answer

Individuals can request the withholding of federal income taxes when they first apply for benefits, according to the Social Security Administration. If individuals are already receiving benefits, and they want to change or stop withholding, they need to complete Form W-4V from the Internal Revenue Service.

Continue Reading

Full Answer

Individuals can select the percentage of federal taxes from their monthly benefits that they want withheld. They can have 7, 10, 15 or 25 percent of their benefits withheld. The Social Security Administration only allows withholding of these percentages, not specific dollar amounts. Individuals can call the Social Security Administration to find out what each percentage amount equals in dollars.

Individuals must pay federal income taxes on their benefits when they have other sources of income above a certain level, according to the Social Security Administration. Such income may come from any source that needs to be reported on a tax form. If an individual's "combined income" is between $25,000 and $34,000, the he may pay taxes on up to 50 percent of the benefits. If it is above $34,000, the taxpayer may pay taxes on up to 85 percent of the benefits. No taxpayer pays taxes on more than 85 percent of benefits. For the purposes of the Social Security Administration, a taxpayer's combined income is the sum of the adjusted gross income, taxable interest and half the amount of the yearly benefits.

Learn more about Income Tax
Sources:

Related Questions

Explore