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What is excluded social security income
Old 05-02-2020, 01:52 PM   #1
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What is excluded social security income

Hello to all,

I was reviewing a book ( a concise guide to tAxes in retirement by Bruce Larsen. 2016 edition) . At the beginning several examples were given about a married filed jointly couple and what their taxes would be for their situation of income and social security. After they listed joint social security incomes they listed a “excluded social security” amount which they subtracted from the former . For example:

Joint social security. 65230.00
Excluded social security. (55137.25)

Taxable social security. 10092.75

I googled “ exclusive social security. ” It doesn’t seem to apply to the normal retiree. Maybe if you were self employed and paid employee healthcare premiums or a listing of other things. I was surprised to see it in the book since it seems to apply only to business related items and not the average retiree.

Can anyone explain what excluded social security is and why it would appear in the beginning of an elementary guide to taxes for retirees?

thanks
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Old 05-02-2020, 02:08 PM   #2
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It sounds like they are referring to the SS that is exempt from tax. It can be between 15% and 100% depending on your "combined income".

https://www.ssa.gov/planners/taxes.html
https://www.fool.com/retirement/2016...etirement.aspx
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Old 05-02-2020, 02:12 PM   #3
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The amount of your social security that is subject to tax is figured using this worksheet. https://www.irs.gov/pub/irs-pdf/p915.pdf#page=16

I would assume that "excluded social security" as used in your book means the full amount of social security minus the amount of social security subject to taxation as calculated with the IRS worksheet.

But that's just an assumption. You would need to do the math to see if I am right.
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Old 05-02-2020, 08:17 PM   #4
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I would have called it the non-taxable part of SS.
You can enter your example in this calculator https://www.mortgagecalculator.org/c...calculator.php

and then see if the taxable amount of SS agrees. If so, the excluded part is the non-taxable part = total SS less taxable amount of SS as others have said.
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