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URL:  http://boards.fool.com/how-do-you-define-quotover-65quotif-you-30601604.aspx

Subject:  Re: Annual Income Taxes Done Date:  3/22/2013  7:52 AM
Author:  TMFPMarti Number:  18308 of 19218

How do you define "over 65"...if you both turn 65 in 2012, does this rule apply to filing 2012 taxes, or would you need to turn 65 before 2012?

I define "over 65" as at least 66, thus I apologize. I should have said "65 or older as of the end of the tax year." (See general comments below.)

Also...I thought you had to pay income taxes if your income as a couple was at least $32k and $25k for individuals, including Social Security. At least that's what it says on the SSA site:

"You will have to pay federal taxes on your Social Security benefits if you file a federal tax return as an individual and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income of more than $32,000."

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/493/~/pa......


Indeed it does say that. It's poorly worded. It should have said "You may have to pay...." In fairness to the SSA, you quoted only the first paragraph of that FAQ page. Immediately following is verbiage directing you to the back of your 1099 for more information. There you'll find that the subject really is how much, if any, of your SS benefit is included in your gross income. This can be anything from 0% to 85%. (See general comments below.)

When your statement and SSA's are in conflict, which takes precedence?

Mine, of course. They're never entertaining. I hit the mark now and again.

Do they both need to be true to avoid federal income tax? For example, suppose a 65+ couple gets $40k in SS income and $20k in other income--do they file/pay federal income tax or not?

Possibly. This is one where I'd do the calculation. (Final "see general comments below.")

You read about them in People Magazine. Here are the much heralded "General Comments."

1. You asked about precedence. Neither what I write nor what you see at the SSA website or an IRS publication has any. What you see in all of these is a good-faith effort to turn incredibly complicated statutory language into something useful. I think we all do a remarkable job, but the reader needs to help. Which brings us to

2. Confess to selective reading and I'm sure the judge will let you off easy. You evidently stopped reading after the first paragraph of the SSA link. This is a common error when reading anything regarding tax law. "God, I really don't want to slog through this, so that sounds good enough to me." There's almost always a "but...or if..." lurking.

You also have to contribute some thought. There's no way the SSA could know whether you were going to have to pay tax or not, regardless of your income. Do they know whether you itemize deductions, or whether you're supporting 23 grandchildren?

3. Be careful when you're eavesdropping. Read in a total vacuum there were two problems with my original post in this thread. One I've addressed. The other is that it's a relatively recent (2009 I think) development that in some cases you have to do the SS calculation to determine filing requirement. It used to be that if you didn't have at least the filing requirement in non-SSA income none of your SS benefit would be taxable even if you received the maximum SS benefit. However, the $25,000 and $32,000 numbers are fixed in law for at least 20 years, while the maximum SS benefit has grown. Thus in the fact pattern you presented there may be a filing requirement.

But back to the eavesdropping part. My original comment wasn't a lesson in the taxation of SS benefits, it was part of a conversation directed to Retired Vermonter, who hasn't had to pay tax the last 4 years. I'll stand by what I said to him.

Lurkers need to remember that different facts can lead to different answers, especially when dealing with tax law. I've rarely heard a tax law question that had any really correct answer other than "it depends." More information is almost always needed, so don't draw too much of a conclusion from the answer to someone else's question.

Phil
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