Federal tax witholding

[TLVB]

Hello everyone,

Im trying to figure out if my parents need to be withholding federal tax. They are both on Social Security. Right now I have my dad withdrawing 15% federal.

I found this on the social security website regarding taxes.

If you file a joint return, and you and your spouse have a combined income* that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.

The way Income is calculated is the following:

Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your "combined income"

Background: My parents file jointly. They have no nontaxable interest.

My dad makes:
Pension = 5446.44 per year. (I believe this falls in Adjusted gross Income)
Social Security Benefit (½ of total SS benefit a year) = $6281.40

My Mom makes:
Social Security Benefit (½ of total SS benefit a year) = $8070

Combined = 19797.84 (If im doing my math right)

So considering they are below the 32k should I reduce my dads Social Security withholding to 0%? There is currently no tax being withdrawn from my dads pension. Should he be withholding from his pension? I would like them not have to owe during tax time. Any other tax suggestions / recommendations ?

Thank you for your help!!

Regards,
JR

[Petunia 100]

Hello everyone,

Im trying to figure out if my parents need to be withholding federal tax. They are both on Social Security. Right now I have my dad withdrawing 15% federal.

I found this on the social security website regarding taxes.

If you file a joint return, and you and your spouse have a combined income* that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.

The way Income is calculated is the following:

Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your "combined income"

Background: My parents file jointly. They have no nontaxable interest.

My dad makes:
Pension = 5446.44 per year. (I believe this falls in Adjusted gross Income)
Social Security Benefit (½ of total SS benefit a year) = $6281.40

My Mom makes:
Social Security Benefit (½ of total SS benefit a year) = $8070

Combined = 19797.84 (If im doing my math right)

So considering they are below the 32k should I reduce my dads Social Security withholding to 0%? There is currently no tax being withdrawn from my dads pension. Should he be withholding from his pension? I would like them not have to owe during tax time. Any other tax suggestions / recommendations ?

Thank you for your help!!

Regards,
JR

Your parents aren't going to have ANY federal income tax liability, JR. They don't need to do any withholding, and they don't even need to file an income tax return. (They will need to do so for 2012, in order to get a refund for the withholding that has already happened this year).

They don't have enough income for SS to be taxable. The pension is taxable, but is far less than their standard deduction + personal exemptions, so will fall into the 0% bracket.

State income tax rules vary so widely, I can't comment on their state income tax situation. You should find out, assuming their state has an income tax.

[TLVB]

Your parents aren't going to have ANY federal income tax liability, JR. They don't need to do any withholding, and they don't even need to file an income tax return. (They will need to do so for 2012, in order to get a refund for the withholding that has already happened this year).

They don't have enough income for SS to be taxable. The pension is taxable, but is far less than their standard deduction + personal exemptions, so will fall into the 0% bracket.

State income tax rules vary so widely, I can't comment on their state income tax situation. You should find out, assuming their state has an income tax.

Petunia,

Thank you very much for your response. They live in GA. So I will try to find some information on state tax. Thanks again!

[jpg7n16]

Any 401k withdrawals? IRA withdrawals? Part time jobs?

A pension may not be the only source of "income"