A new online service is available to help people who receive Social Security benefits have the information they need to file their tax returns. If you didn’t receive or misplaced your SSA-1099 or SSA-1042S, you can now use an online my Social Security account to get an instant replacement for tax purposes.
Setting up an account is easy, secure, and convenient. You just need to go to www.socialsecurity.gov/myaccount.
Getting your replacement SSA-1099 or SSA-1042S is just a few minutes away with your my Social Security account. Learn what else you can do with a my Social Security account at www.socialsecurity.gov/myaccount.
If you need further assistance with your Social Security tax forms you may contact Tax On Wheels, LLC so we may assist you. We can be reached at 803 732-4288.
Social Security has published new instructions that allow the agency to process more claims in which entitlement or eligibility is affected by a same-sex relationship. These instructions come in response to last year’s Supreme Court decision in U.S. vs. Windsor, which found Section 3 of the Defense of Marriage Act unconstitutional.
This latest policy development lets the agency recognize some non-marital legal relationships as marriages for determining entitlement to benefits. These instructions also allow Social Security to begin processing many claims in states that do not recognize same-sex marriages or non-marital legal relationships. We have consulted with the Department of Justice and determined that the Social Security Act requires the agency to follow state law in Social Security cases. The new policy also addresses Supplemental Security Income claims based on same-sex relationships.
“As with previous same-sex marriage policies, we worked closely with the Department of Justice,” said Carolyn W. Colvin, Acting Commissioner of Social Security. “We are bound by the law within the Social Security Act, and we have to respect state laws. We remain committed to treating all Americans fairly, with dignity, and respect.”
If a person believes he or she may be entitled to or eligible for benefits, they are encouraged to apply now.
To learn more, please visit www.socialsecurity.gov/same-sexcouples.
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Some people must pay taxes on their Social Security benefits. If you get Social Security, you should receive a Form SSA-1099, Social Security Benefit Statement, by early February. The form shows the amount of benefits you received in 2012.
Here are five tips from the IRS to help you determine if your benefits are taxable:
1. The amount of your income and your filing status affect whether you must pay taxes on your Social Security.
2. If Social Security was your only income in 2012, your benefits are probably not taxable. You also may not need to file a federal income tax return.
3. If you received income from other sources, then you may have to pay taxes on your benefits.
4. You can follow these two quick steps to see if your benefits are taxable:
• Add one-half of the Social Security benefits you received to all your other income, including tax-exempt interest. Tax-exempt interest includes interest from state and municipal bonds.
• Next, compare this total to the ‘base amount’ for your filing status. If the total is more than your base amount, then some of your benefits may be taxable.
The three 2012 base amounts are:
$25,000 for single, head of household, qualifying widow or widower with a dependent child or married individuals filing separately who did not live with their spouse at any time during the year;
$32,000 for married couples filing jointly; and
$0 for married persons filing separately who lived together at any time during the year.
5. If you use IRS e-file to prepare and file your tax return, the tax software will figure your taxable benefits for you. If you file a paper return, you can use the Interactive Tax Assistant tool on the IRS website to check if your benefits are taxable. The ITA is a resource that can help answer tax law questions. There also is a worksheet in the instructions for Form 1040 or 1040A that you can use to figure your taxable benefits.
For more information on the taxability of Social Security benefits, you may contact Tax On Wheels, LLC at 803 732-4288.
If you were married or divorced and changed your name last year, be sure to notify the Social Security Administration before you file your taxes with the IRS. If the name on your tax return doesn’t match SSA records, the IRS will flag it as an error and that may delay your refund.
Here are five tips for a person whose name has changed. They also apply if your dependent’s name has changed.
1. If you have married and you’re using your new spouse’s last name or you’ve hyphenated your last name, notify the SSA. That way, the IRS computers can match your new name with your Social Security number.
2. If you were divorced and are now using your former last name, notify the SSA of your name change.
3. Letting the SSA know about a name change is easy. File Form SS-5, Application for a Social Security Card, at your local SSA office or by mail with proof of your legal name change.
4. You can get Form SS-5 on the SSA’s website at www.ssa.gov, by calling 800-772-1213 or at local SSA offices. Your new card will have the same number as your former card but will show your new name.
5. If you adopted your new spouse’s children and their names changed, you’ll need to update their names with SSA too. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS. The ATIN is a temporary number used in place of an SSN on the tax return. Form W-7A is available on the IRS.gov website or by calling 800-TAX-FORM (800-829-3676).
You may contact Tax On Wheels, LLC at 803 732-4288 if you need assistance with a name change at the IRS or state taxing authorities.
WASHINGTON — The Internal Revenue Service today released revised Form 941 enabling employers to properly report the newly-extended payroll tax cut benefiting nearly 160 million workers.
Under the Middle Class Tax Relief and Job Creation Act of 2012, enacted yesterday, workers will continue to receive larger paychecks for the rest of this year based on a lower social security tax withholding rate of 4.2 percent, which is two percentage points less than the 6.2 percent rate in effect prior to 2011. This reduced rate, originally in effect for all of 2011, was extended through the end of February by the Temporary Payroll Tax Cut Continuation Act of 2011, enacted Dec. 23.
No action is required by workers to continue receiving the payroll tax cut. As before, the lower rate will have no effect on workers’ future Social Security benefits. The reduction in revenues to the Social Security Trust Fund will be made up by transfers from the General Fund.
Self-employed individuals will also benefit from a comparable rate reduction in the social security portion of the self-employment tax from 12.4 percent to 10.4 percent. For 2012, the social security tax applies to the first $110,100 of wages and net self-employment income received by an individual.
The new law also repeals the two-percent recapture tax included in the December legislation that effectively capped at $18,350 the amount of wages eligible for the payroll tax cut. As a result, the now repealed recapture tax does not apply.
The IRS will issue additional guidance, as needed, to implement the newly-extended payroll tax cut, and any further updates will be posted on IRS.gov.
Many people may not realize the Social Security benefits they received in 2011 may be taxable. All Social Security recipients should receive a Form SSA-1099 from the Social Security Administration which shows the total amount of their benefits. You can use this information to help you determine if your benefits are taxable. Here are seven tips from the IRS to help you:
1. How much – if any – of your Social Security benefits are taxable depends on your total income and marital status.
2. Generally, if Social Security benefits were your only income for 2011, your benefits are not taxable and you probably do not need to file a federal income tax return.
3. If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status (see below).
4. Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet. Your tax software program will also figure this for you.
5. You can do the following quick computation to determine whether some of your benefits may be taxable:
6. The 2011 base amounts are:
For additional information on the taxability of Social Security benefits contact Tax On Wheels, LLC at 803 732-4288
WASHINGTON — Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.
Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.
Employers and payroll companies will handle the withholding changes, so workers should not need to take any additional action.
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.
The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new “recapture” provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012 is due April 30, 2012.
Tax On Wheels, LLC will of course handle all necessary changes for our payroll clients. If you are not a payroll client please give us a call at 803 732-4288 to see if we can help you.
Don’t be too quick to answer.
Many people try to file tax returns using the wrong name. This happens frequently in cases of marriage or divorce when a name has been recently changed. If you try to electronically file your return with the wrong name your return is likely to be rejected by the IRS, thereby delaying your refund until your return can be resubmitted. If you file a paper return by mail the delay from using the wrong name most probably will be much longer.
Although you may be legally married or divorced your name doesn’t change unless you submit the proper documents to the Social Security Administration. For tax filing purposes your name is the name printed on the most recent social security card issued to you. So if your name has changed (or you would like it to be changed) you should contact the Social Security Administration so that you will be ready to file your tax return this tax season.
If you can’t wait until your social security card can be reissued simply file your return with your name as it is currently listed on your social security card. The last name may not match the name of your spouse but at least your tax return will be finished and you can get your hands on that tax refund much sooner so you can start stimulating the economy. The choice is yours.
Take a look at this video for further details.