My friend just turned 66 and went to the Social Security Administration office to find out how much he is eligible to receive in SS retirement income. He also receives VA disability payments which are not affected by the SS payments, and he has a W-2 income (which, of course, is taxable).
So, his question is, if he decides to start collecting his Social Security retirement benefits now, will those benefits be considered taxable income for him (he lives in Pennsylvania, U.S.A.).
It depends upon how much his other income plus 1/2 of his social security comes to. Here's a link at the IRS that explains when it is taxable and how to compute how much may be taxable:
Yes. However, there is a formula to determine how much is taxed.
Basically, if his income (ignoring the disability payments) is $25k (or $32k if married, and counting the spouse's income), then the SSI may be taxed.
Thanks D. Stussy and Alan. I'll pass the information on to my friend.
His W-2 income (ignoring the disability payments) is about $54k, and he was told that if he decides to start collecting SS retirement benefits now they will be about $1,875 per month -- from which $90/month will be deducted to pay for Medicare benefits.
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