Dear Tax Talk,
If you turned 64 in 2015 and collected Social Security retirement benefits and worked $31 over the limit allowed, how much money are you taxed on ? What is the Social Security earnings limit?
Exceeding the Social Security earnings limit may result in taxes and, depending on your age, could also result in cut benefits.
The taxability of Social Security benefits is a function of your IRS filing status and your “combined income.”
The IRS has a work sheet in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits, that goes through 19 steps to calculate your taxable benefits.Here is a summary of that process:
Combined income is the sum of your adjusted gross income, tax-exempt interest and half of your annual Social Security benefit.
Another issue with respect to an earnings limit could come into play if you work, receive Social Security retirement benefits and are younger than full retirement age. Here’s how it works:
Your full retirement age depends on when you were born. In your particular situation, your full retirement age is 66.
You earned $31 over the earnings limit, so the adjustment to your Social Security income is $15.
The good news is that as you continue to work and pay Social Security taxes, the Social Security Administration will review your records every year to determine whether your additional earnings will increase your monthly benefit.
Thanks for the great question and all the best to you.
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