Social Security Taxation Update

Posted: March 28, 2012 in Uncategorized
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Unless you file a request for withholding income tax from your Social Security benefits, they will not deduct any withholding. This can mean that you owe taxes on as much as 85% of your Social Security if you have other income and the result will be a significant tax bill next April. You can ask Social Security to withhold federal taxes from your Social Security when you apply for benefits. If you are already receiving benefits or if you want to change or stop your withholding, you'll need a form W-4V from the Internal Revenue Service (IRS). This form is used for both the civilian and military community as DFAS will only deduct additional taxes from your retirement/annuity pay if requested via a W-2P. You can download the W-4V form from http://www.irs.gov/pub/irs-pdf/fw4v.pdf or call the IRS at 1-800-829-3676 and ask for Form W-4V, Voluntary Withholding Request to be sent to you. (If you are deaf or hard of hearing, call the IRS TTY number, 1-800-829-4059.)
When you complete the form, you will need to select the percentage of your monthly benefit amount you want withheld. You can have 7%, 10%, 15% or 25% of your monthly benefit withheld for federal taxes only. There is no provision for withholding for state income tax. Note: Only the percentages noted can be withheld. Flat dollar amounts are not accepted. If you want to know how much a particular percentage is equal to in dollars, call Social Security at 1-800-772-1213 (TTY 1-800-325-0778). Sign the form and mail it to Jamaica Teleservice Center, PPO Box 5800, Jamaica New York 11431-5800. If you need more information about tax withholding, read IRS Publication 554, Tax Guide for Seniors , and Publication 915, Social Security and Equivalent Railroad Retirement Benefits . Please keep in mind that changing your withholding does not change your tax liability and you will have to pay any remaining amount owed when you file your return next April.
If you want DFAS to withhold additional taxes from your military pension or annuity use a W-4P form and send to Defense Finance and Accounting Center, U.S. Military Annuitant Pay, POB 7131, London, KY 40742-7131. There is no restriction on the additional dollar amount of withholding you can request. The form can be downloaded from http://www.irs.gov/pub/irs-pdf/fw4p.pdf. [Source: Various Mar 2012 ++]

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