Social Security benefits are an important source of income for many retirees. However, it is important to understand that Social Security benefits may be subject to federal income taxes. The amount of tax you owe will depend on your total income, including your Social Security benefits and any other sources of income, such as wages, pensions, or investment income.
Who Should Have Taxes Withheld from Their Social Security Check?
If you expect to owe federal income taxes on your Social Security benefits, you should have taxes withheld from your monthly check. This will help you avoid a large tax bill when you file your income tax return.
You may want to consider having taxes withheld if:
- You have other sources of income, such as wages, pensions, or investment income.
- Your total income, including your Social Security benefits, is more than $25,000 if you are single or $32,000 if you are married filing jointly.
- You itemize your deductions on your income tax return.
How to Have Taxes Withheld from Your Social Security Check
To have taxes withheld from your Social Security check, you need to complete Form W-4V, Voluntary Withholding Request. You can get this form from the Social Security Administration (SSA) website or by calling the SSA at 1-800-772-1213.
On the form, you will need to provide your personal information, including your name, address, and Social Security number. You will also need to indicate the amount of tax you want to have withheld from your check. You can choose to have 7%, 10%, 12%, or 22% of your benefit withheld.
Estimated Tax Payments
If you do not want to have taxes withheld from your Social Security check, you can make estimated tax payments to the IRS. Estimated tax payments are quarterly payments that you make to the IRS based on your estimated tax liability for the year.
To make estimated tax payments, you will need to complete Form 1040-ES, Estimated Tax for Individuals. You can get this form from the IRS website or by calling the IRS at 1-800-829-1040.
Consequences of Not Having Taxes Withheld
If you do not have taxes withheld from your Social Security check and you owe taxes on your benefits, you may have to pay a penalty when you file your income tax return. The penalty is calculated based on the amount of tax you owe and the length of time that you have not been having taxes withheld.
Deciding whether or not to have taxes withheld from your Social Security check is a personal decision. There are advantages and disadvantages to both options. If you are unsure of what is best for you, you should consult with a tax professional.
How to withhold taxes from Social Security
FAQ
Is it best to have taxes taken out of Social Security?
How much tax will be deducted from my Social Security check?
How much should I have withheld from my Social Security check?
At what age is Social Security no longer taxable?
Do I have to pay tax on Social Security benefits?
Substantial income includes wages, earnings from self-employment, interest, dividends, and other taxable income that must be reported on your tax return. You will pay tax on your Social Security benefits based on Internal Revenue Service (IRS) rules if you: Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits.
Do I need to get taxes withheld from Social Security benefits?
It isn’t obligatory for you to have taxes withheld from your Social Security benefits. However, many people voluntarily choose to withhold taxes to cover any taxes that may come due. You don’t need to get taxes withheld if this is your only income.
How do I withhold taxes from my Social Security benefits?
If you make enough in retirement that you need to pay federal income tax, then you will also need to withhold taxes from your monthly income. To withhold taxes from your Social Security benefits, you will need to fill out Form W-4V (Voluntary Withholding Request). The form only has seven lines.
Should you pay Social Security tax with estimated tax payments?
Regardless of the method you choose, withholding tax from Social Security and making estimated tax payments help ensure you have paid sufficient tax. You want to avoid an underpayment penalty from the IRS when you file your income tax return.