Tag Archive for Taxing

Receiving Social Security Can Be Taxing

Generally, your Social Security (SS) benefits are not taxable until your modified adjusted gross income (MAGI) is more than the base amount for your filing status. MAGI is your regular AGI (without Social Security income) plus 50% of your Social Security income plus tax-exempt interest income plus certain other infrequently encountered modifications.

The base amounts (threshold where the SS benefits become taxable) are:

• $25,000 if you are single, a head of household, a qualifying widow or widower with a dependent child, or married filing separately and did not live with your spouse at any time during the year;

• $32,000 if you are married and file a joint return; Read More

Written by | Posted in Retirement

Receiving Tips Can Be Taxing

If you work in an occupation where tips are part of your total compensation, you need to be aware of several facts relating to your federal income taxes:

• Tips are taxable – Tips are subject to federal income, social security, and Medicare taxes. The value of non-cash tips, such as tickets, passes, or other items of value, is also income and subject to taxation.

• Include tips on your tax return – You must include in gross income all cash tips received directly from customers, tips added to credit cards, and your share of any tips received under a tip-splitting arrangement with fellow employees.

• Report tips to your employer – If you receive $20 or more in tips in that month, you should Read More

Written by | Posted in Income Tax • Individual