Posts Tagged ‘taxable amount of social security benefits’
Question: how do i determine the taxable amount on 1040a line 12a and 12b?
Answer: You have received a 1099-R from one or more retirement plans. The short of it is that you will see the gross in Box 1 and the taxable amount in Box 3. Very nearly always, there will be a number within Box 2. Usually it will be "7". That means that your IRA, pension or annuity withdrawal is fully taxable, unfortunately. Very rarely is there an exceptoin. If there's a "2", you can look in to it, but nearly always it is taxable. The 1099-R will show the taxable amount about 2/3 of the time. Usually, there will be no doubt. You should call the toll-free number if there is. Rarely, you will not be able to get an answer, so you could call the IRS number at 1-829-3676 or 1-800-829-1954.
The nitty gritty is that the taxable amount is usually 100% of the amount of the pension or annuity. The very nature of the beast means you will have to pay tax when you receive a 1099-R. You may get Federal income tax withheld if you choose. I would send in estimated tax: a little in April and June, then a little more in Sept and enough in Dec to make I'm covered and still have some money for the bills during the year.
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Memphis attorney Vincent Perryman discusses Estate Planning on legalease with Bill Jones part 2
To love, honor, cherish and pay taxes
Q: My fiancé and I were planning to get married Dec.11, 2010. We both earn about $140,000 a year, and with the new proposed tax laws, we are having second thoughts.