Q. I am 66 years old and receive my pension, social security, unemployment and an early retirement package of 50% of salary. Are all of these sources accounted for as revenue?
– worried
A. The short answer is yes, everything is taxable.
Pensions, including IRAs, are taxable income, with the exception of Roth IRAs, said Michael Karu, a Levine, Jacobs & Co. certified public accountant in Livingston.
Unemployment is taxable for federal purposes, but not for New Jersey, like Social Security, he said.
“The only benefit, if you can call it that, is that Social Security is not 100% taxable,” he said. “The percentage varies according to your total income.”
According to the IRS, to find out if Social Security benefits are taxable, taxpayers must take half of the Social Security money they collected during the year and add it to their other income.
Other revenues include pensions, salaries, interest, dividends and capital gains, he said.
If you are single and that total amounts to more than $ 25,000, part of the Social Security benefits may be taxed.
If you are married with a joint claim, you should take half of Social Security, plus half of your spouse’s Social Security, and add that to all of your combined earnings, the IRS said. If that total exceeds $ 32,000, part of your Social Security may be taxable.
The IRS said that 50% of taxpayer benefits can be taxed if:
- Single, single, householder or widower or qualified widower with an income of $ 25,000 to $ 34,000.
- Married filing separately and living away from spouse throughout the year 2019, with income from $ 25,000 to $ 34,000.
- Declaration of marriage together with an income of $ 32,000 to $ 44,000.
Up to 85% of a taxpayer benefits can be taxed if they are:
- Single filing, householder or widower or qualified widower with an income in excess of $ 34,000.
- Married filing with income greater than $ 44,000.
- He married a separate statement and lived away from his spouse throughout 2019, with an income in excess of $ 34,000.
- He married a separate statement and lived with his spouse at any time during 2019.
Also note that New Jersey offers a pension exclusion for those who earn less than $ 100,000 a year, are 62 or older, or are disabled, as defined by the Social Security Administration guidelines, so it is possible for you to escape state taxes about your income.
Send your questions to [email protected].
Karin Price Mueller writes the Bamboozled NJ Advance Media column and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Meet NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.comin weekly electronic newsletter.