Social Security Connection-February 2009

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Q: I retired with a civil service pension, but also qualified for Social Security. When I was doing my taxes last year, I was startled to find out that I was taxed 71 percent on my Social Security income of $377 a month.

Why are people taxed on their Social Security benefits? It doesn’t make sense to me. – M.R., Texas

A: People who file a federal tax return as an “individual” and whose total income is more than $25,000, and couples who file a joint return and have a total combined income that is more than $32,000 have to pay income tax on their Social Security benefits.

For more information and a more detailed explanation, call the Internal Revenue Service (IRS) toll-free at 1 (800) 829-3676 and ask for IRS Publication Number 915.

 

Q: I retired last May at the age of 65 and began drawing Social Security benefits. Can I still work and make any amount of money without having to pay any back, or do I have to be 70 before I can earn any amount? – E.D., Iowa

A: The earnings cap is eliminated once you reach full retirement age. Therefore, your earnings will not reduce your Social Security benefits once you reach full retirement age, no matter how much you earn.

Prior to reaching full retirement age, however, benefits will be reduced if a person’s earnings exceed certain limits. To find out more, contact the Social Security office at 1 (800) 772-1213. Or visit its Web site at www.SocialSecurity.gov.

 

Social Security Connection  

  Send your Social Security questions to: CAPPER’S, Social Security Connection, 1503 S.W. 42nd St., Topeka, KS 66609-1265. Questions will be used as space allows. We are unable to send individual responses.

To contact the Social Security office, call, toll-free, 1 (800) 772-1213, or visit the Web site at www.SocialSecurity.gov.