Detroit, Michigan – As tax season progresses, the Internal Revenue Service (IRS) has already processed over 44 million tax returns and issued nearly $93 billion in refunds. For Social Security recipients, filing a tax return this year, even if not required, could be beneficial.
Factors such as age, marital status, and income outside of Social Security benefits play a significant role in determining whether an individual needs to submit a tax return to the IRS. Filing a return, even when not mandatory, could result in receiving refundable tax credits or refunds for income taxes paid during the year.
Understanding whether Social Security benefits are taxable involves considering various criteria, such as gross income and combined income. Different thresholds apply based on filing status and other factors, determining the tax liability on Social Security benefits.
Filing a tax return, even if not obliged, may be advantageous for those looking to receive a tax refund. Factors like federal tax income withheld from pay or estimated tax payments made in the previous year could result in a tax refund, providing a financial benefit to the filer.
Additionally, qualifying for tax credits like the earned income tax credit, child tax credit, or child and dependent care tax credit can further incentivize filing a tax return. These credits may lead to refunds for eligible individuals, contributing to their overall financial well-being during tax season.
To determine the amount of Social Security benefits for the previous year, individuals can refer to the Social Security Benefit Statement sent out by the Social Security Administration. This statement, received in January either by mail or online, contains crucial information on benefits received during the year, aiding in tax return preparation.
Overall, filing a tax return, even when not required, can lead to various benefits for individuals, including potential tax refunds and eligibility for refundable tax credits. Understanding the implications of Social Security benefits on tax liability is essential for making informed decisions during tax season.