I’m a 77 year old retired school teacher. In addition to social security I receive my pension. Am I subject to income tax?
Dear retired school teacher:
The answer to your questions depends largely on other factors. I’d need to know your marital status and income information, how much you receive from Social Security and how much from your pension. I can give you some general guidelines as set out by the IRS.
_ In cases where Social Security is your only source of income, your income is not taxable.
_ If you derive income from other sources in addition to Social Security it may become taxable if your modified adjusted gross income exceeds the “base” amount for your filing status.
_ To determine your “base” amount there is a worksheet in the Form 1040 instruction booklet on page 25. (Link: http://www.irs.gov/pub/irs-pdf/i1040gi.pdf ).
_ 2007 base amounts are:
· $32,000 for married couples filing jointly.
· $25,000 for single, head of household, qualifying widow/widower with a dependant, or married individuals filing separately who did not live with their spouses at any time during the year.
· $0 for married persons filing separately who lived together during the year.
Note: HOW TO FIGURE OUT YOUR BASE AMOUNT
1. Add one-half of the total Social Security you received to all other income, including any tax exempt interest and other exclusions from income.
2. Then, compare this total to the base amount of your filing status. If the total is more than your base amount, then some of your benefits may be taxable.
For additional questions you can contact a Tax Consultant for a free consultation.