Question

TAXES

Forum|Forum|3 years ago
February 27, 2023
3 replies
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I worked part time @$6000 roughly a year. I am retired and over 63.... I get SS and I had a 401 account. Took $form my 401 to pay for medical. I have a pension and it is not annuity pension so nothing in the box 9B. It looks like I am being charged $30 for not withholding enough Fed Tax. I paid the taxes on my Social Security and my 401 withdraw. I made $6000 so why am I being charged income tax. It is under $12,000. I had paid about $4000 in medical ins and $5,500 in medical bills. I just want to know why I have to pay over $1000? Please someone explain .. Is pension and social security and savings income. What is meant by earned income??

B

Bsch4477

Employee

Was your $6,000 self employment income? If so, you not only pay income tax on that income but also 15.3% self employment tax. Yes, social security and pension withdrawals are income although how much your social security is taxed depends on your other income.

KrisD15

Pensions are taxable income, but the amount that is taxable is usually reduced proportionately by the amount you contributed. Look at your 1040 lines 5a and 5b.

Social Security may or may not be taxable, look at your 1040 line 6. 6a shows what you received, line 6b shows what is taxable.

Distributions from an IRA or 401(k) are taxable income because you did not pay tax on that amount when you made the contributions. The amount reported as taxable income on your W-2 was reduced when you made those contributions to your 401. Now when you take distributions, you need to pay the tax on those distributions. Since you are not under-age for the destructions, you are not charge the "penalty tax".

Earned income would be the 6,000 from your job. Social Security and retirement savings are not earned income. You need to have earned Income to contribute to an IRA or similar retirement plan.

The Standard Deduction for Single Filers for tax Year 2022 is 12,900.

If you have more than that in Itemized Deductions, you can claim the larger amount of deductions on Schedule A.

Medical expenses are reduced according to your Adjusted Gross Income, which is listed on Line 11 of your 1040.

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O

Opus 17

Employee

We can't see your return.

Print your return and review it. It's basically a very long addition and subtraction math problem. Some of the rules as to what gets on the form are complicated, but you should be able to follow the math.

Your pension or 401k withdrawals are taxable income, as is your part time job. If you are single, and the total of your other income plus half your social security is more than $25,000, then part of your social security is taxable as well.

You can subtract from your taxable income, either your standard deduction or the total of all your itemized deductions. The rest is subject to tax.

If you owe tax, and did not make periodic payments during the year, you may also be assessed a penalty for failing to make those periodic payments.

It's all there in the forms, if you print them out and review them before you file.