Form 8960 - Soc Sec Benefit is taxed

Forum|Forum|2 years ago
April 27, 2024
2 replies
0 views

I noticed that form 8960 sneakily is taxing 3.8% on the Soc Security benefit. This is because the SS benefit is part of the AGI, and they compute the Net Investment Income tax on the difference of the AGI and the threshold.

Does anyone have a view on this topic.

Not A Product Question

Bsch4477

Employee

Yes, the 85% maximum tax on Social Security is included in AGI and taxed accordingly.

dmertz

Employee

It might look like the taxable amount of Social Security income is being taxed an additional 3.8%, but that isn't really what is happening. It only looks that way because you entered the Social Security income after entering much of your other income. What's really happening is that the taxable amount of Social Security income is pushing more of your investment income above the threshold where the investment income is taxed an additional 3.8%. With respect to NIIT, the investment income sits on top of your other income.