retirement

Taxability of Social Security in marriage

Judy O'ConnorDear Tax Talk,
What's the taxability of Social Security after marriage? I'm a 71-year-old widower and plan on marrying a 70-year-old widow. Her only income is her Social Security. I collect Social Security plus an IRA, from which I take a lump-sum distribution annually of $40,000. I can adjust this annual amount. I also have a few thousand in interest and dividends each year. Will our getting married cause our Social Security benefits to be taxed an additional amount?
-- Frank

Dear Frank,
Best wishes on your upcoming wedding. As it stands now, your future wife will not pay taxes on her 2013 Social Security income since that was the only income she received.

However, for 2014, if you are married, up to 85 percent of your Social Security benefits may be taxable if your income exceeds a "base amount." The base amount takes into account one-half of your combined Social Security benefits, plus your taxable pensions, wages, interest, dividends and other taxable income, plus any tax-exempt interest and some other excludable income listed in IRS Publication 915.

For 2014, unless changes are made, the base amount is as follows:

  • $25,000 if your filing status is single, head of household or qualifying widow(er).
  • $25,000 if you are married filing separately and lived apart from your spouse for all of 2013.
  • $32,000 if your filing status is married filing jointly.
  • $0 if you are married filing separately and lived with your spouse at any time during 2013.

Because you are taking $40,000 out of your IRA each year, this means that the Social Security benefits for both of you will be taxable in 2014. If you can lower the amount of distributions so that your base amount does not exceed $32,000, then your Social Security benefits will not be taxable.

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