J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

34.2 Social Security Benefits Subject to Tax

If you received or repaid Social Security benefits in 2012, you will receive Form SSA-1099 from the Social Security Administration, showing the total benefits paid to you and any benefits you repaid to the government in 2012. Box 3 of Form 1099-SSA shows the total benefits paid to you in 2012. This may include, in addition to Social Security retirement benefits, survivor and disability benefits, which are subject to the same tax rules as retirement benefits, but not Supplemental Social Security (SSI), which is not taxable. Included in the Box 3 total are amounts withheld from your benefits for Medicare premiums, workers’ compensation offset, or attorneys’ fees for handling your Social Security claim; these and other withholdings are itemized in the “description” section below Box 3.

The net benefit shown in Box 5 of Form SSA-1099 (benefits paid less benefits repaid) is the benefit amount used to determine the taxable portion of your benefits (if any) (34.3). Keep Form SSA-1099 for your records; do not attach it to your return.

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Planning Reminder

Voluntary Withholding on Social Security Benefits

You can use your Social Security benefits to meet your estimated and final tax liability by electing on Form W-4V to have tax withheld from benefits at a 7%, 10%, 15%, or 25% rate.

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Railroad Retirement ...