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In applying for my wife's Medicare, I found out that she can draw SS on my account, her full retirement age (born 1951) is 66. Apparently she will get over $2K per month.
Apparently this does not affect my own ability to draw SS at whatever age I decide to take it (right now I am leaning towards waiting till age 70, but circumstances may change).
Will her SS be regular taxable income for Federal purposes?
Given that we don't really need the money (I earn about $120K per year), if it is taxable, ideas on how to reduce the tax bite? House is paid for, just her and me, no minors or other dependents.
In applying for my wife's Medicare, I found out that she can draw SS on my account, her full retirement age (born 1951) is 66. Apparently she will get over $2K per month.
Apparently this does not affect my own ability to draw SS at whatever age I decide to take it (right now I am leaning towards waiting till age 70, but circumstances may change).
Will her SS be regular taxable income for Federal purposes?
Given that we don't really need the money (I earn about $120K per year), if it is taxable, ideas on how to reduce the tax bite? House is paid for, just her and me, no minors or other dependents.
Maybe, it depends on your other joint income. There is an exemption for the first $32K if filing MFJ.
Read the explanation at https://www.ssa.gov/planners/taxes.html where it says, in part:
"Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits."
In applying for my wife's Medicare, I found out that she can draw SS on my account, her full retirement age (born 1951) is 66. Apparently she will get over $2K per month.
Apparently this does not affect my own ability to draw SS at whatever age I decide to take it (right now I am leaning towards waiting till age 70, but circumstances may change).
Will her SS be regular taxable income for Federal purposes?
Given that we don't really need the money (I earn about $120K per year), if it is taxable, ideas on how to reduce the tax bite? House is paid for, just her and me, no minors or other dependents.
taxes depend on your total household income .
but i am confused . she can't draw off your record unless you file and collect first , you can't delay as file and suspend is no longer allowed . you can file restricted application and get 1/2 hers letting your own grow assuming you are fra . but she can't get anything from your record unless you are collecting first .
in fact she can't even get a spousal benefit added to her own benefit until you collect .
if she has no work record she can't collect until you do either .
the way you are describing it you can't do it
something is wrong here
Last edited by mathjak107; 03-17-2017 at 03:05 PM..
Mathjak, I am basing this on more of a remark from my tax accountant. Maybe she didn't look things up and so is not right. I wondered if this is not "too good to be true".
I need to do more research. If she can do this, it won't be till next November anyway.
DW never worked enough quarters outside the house (at least in the US) to have her own SS.
back in the old days you could have done a file and suspend . you file , spouse gets 1/2 and you suspended letting yours grow .
that is now gone .
we are the last group based on our ages to even have restricted application which you can't do since she has no record of her own ..
if she did ,you could have filed for 1/2 her full at your fra and let yours grow .
but nothing can be collected off your record unless you are already collecting. you can show this update to your accountant . i think she should stick to taxes and leave financial planning to those who are in that business .
it would be terrible to plan around mis-leading advice .
MJ is absolutely right. I too am filing a restricted in March 2018 on my wife's SS; she will be 66 this November and will file in Dec- and DID have enough SS to file on her own record. I will wait to file for my own full benefits until 2022 to maximize both our SS, but during the time between 2018 and 2022 our COMBINED SS will be.....(drum roll, MathJak) $15500 per year!!!
In applying for my wife's Medicare, I found out that she can draw SS on my account, her full retirement age (born 1951) is 66. Apparently she will get over $2K per month.
Apparently this does not affect my own ability to draw SS at whatever age I decide to take it (right now I am leaning towards waiting till age 70, but circumstances may change).
Will her SS be regular taxable income for Federal purposes?
Given that we don't really need the money (I earn about $120K per year), if it is taxable, ideas on how to reduce the tax bite? House is paid for, just her and me, no minors or other dependents.
Even if you WERE 70 and maxed out this year on SS the highest payment is around $3500 of which she would get half- since you mentioned you aren't even 70 yet there is no mathematical way she would get over $2,000 based on your record.
MJ is absolutely right. I too am filing a restricted in March 2018 on my wife's SS; she will be 66 this November and will file in Dec- and DID have enough SS to file on her own record. I will wait to file for my own full benefits until 2022 to maximize both our SS, but during the time between 2018 and 2022 our COMBINED SS will be.....(drum roll, MathJak) $15500 per year!!!
NEW CARS FOR ALL!!! DRINKS ON THE HOUSE!!!
This is why we don't use tax accountants.
keep in mind that when you finally do file , if 1/2 your full is more than your wife's full she gets the difference added to her benefit .
we had fidelity test their new in house software for optimizing ss on us . we were one of the first cases they used the new software on .
for the biggest dollars this is the plan they drew up .
i am 64 and my wife 66 .
she has been collecting an early benefit since 62 .
their plan had her stopping her benefit at fra and letting her ss grow again . at 70 she would file again . i would be 66-10 months . i file restricted application for 1/2 hers .
at 70 i file for my own and since 1/2 mine is more than my wife's full she gets 4500.00 in spousal added to her benefit . that would give us about 55k in ss . not bad considering she only worked part time pretty much for decades .
i am playing it by ear and seeing when i actually want to file . i may not wait until 70 . it depends on markets since we are living off our portfolio .
tax accountants pretty much are useless in retirement planning unless like an ed slott that is their specialty . but then they are retirement tax advisers.
Last edited by mathjak107; 03-18-2017 at 05:10 AM..
Even if you WERE 70 and maxed out this year on SS the highest payment is around $3500 of which she would get half- since you mentioned you aren't even 70 yet there is no mathematical way she would get over $2,000 based on your record.
spousal benefits are based on full retirement age only and get no delayed credits from fra to 70 . survivor benefits can see those credits for the spouse waiting until 70 but not regular retirement benefits .
Yes, Matt is correct. Find another tax guy. Amount makes no sense, and she can get nothing unless you file (or are divorced for two years, then it would work!) To answer you original question, if filing MJ, then 85% of her SS will be taxable federally with a salary of $120k. There is nothing that can be done to reduce the taxable amount of SS.In fact, 85% of her SS is taxed whenever your MAGI is over about $42k.
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