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ASK THE EDD LAWYER- ARE MY SOCIAL SECURITY BENEFITS TAXABLE?

By Robert S. Schriebman

We do not handle cases relating to one's eligibility for social security benefits. This is not our area of expertise. Many issues relating to questions of eligibility are best left to the experts who handle these matters on a day-to-day basis. I recently received a communication on our Find Law site where the writer stated he wanted to discuss with me his eligibility for EDD benefits. After giving the matter some though I wrote back to this person and suggested that his best and most economical source for information would be to contact his local EDD office. These people are the real experts. I think the same thing goes for questions about one's eligibility for social security benefits.

As with questions of eligibility for benefits, questions about the taxation of social security benefits should first be directed to the IRS people by visiting their web site or a local IRS office. IRS publications are also very helpful, and they are free. On February 28, 2014, the IRS published "IRS Tax Tip 2014-23" setting forth seven valuable points that should be helpful to you in determining whether your social security benefits are taxable.

Here are seven tips about how Social Security affects your taxes:

  1. If you received these benefits in 2013, you should have received a Form SSA-1099, Social Security Benefit Statement, showing the amount.
  2. If Social Security was your only source of income in 2013, your benefits may not be taxable. You also may not need to file a federal income tax return.
  3. If you get income from other sources, then you may have to pay taxes on some of your benefits.
  4. Your income and filing status affect whether you must pay taxes on your Social Security.
  5. The best, and free, way to find out if your benefits are taxable is to use IRS Free File to prepare and e-file your tax return. If you made $58,000 or less, you can use Free File tax software. The software will figure the taxable benefits for you. If your income was more than $58,000 and you feel comfortable doing your own taxes, use Free File Fillable Forms. Free File is available only at IRS.gov/freefile.
  6. If you file a paper return, visit IRS.gov and use the Interactive Tax Assistant tool to see if any of your benefits are taxable.
  7. A quick way to find out if any of your benefits may be taxable is to add one-half of your Social Security benefits to all your other income, including any tax-exempt interest. Next, compare this total to the base amounts below. If your total is more than the base amount for your filing status, then some of your benefits may be taxable. The three base amounts are:
    • $25,000 - for single, head of household, qualifying widow or widower with a dependent child or married individuals filing separately who did not live with their spouse at any time during the year
    • $32,000 - for married couples filing jointly
    • $0 - for married persons filing separately who lived together at any time during the year

Of course, it is always a very good idea to consult with your tax professional on these issues. That would be my recommendation.

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An EDD lawyer, Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States.

As a trusted EDD attorney, Robert S. Schriebman has successfully dedicated more than 30 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House and the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.