Taxable SSB

[Sandy & Shirley]

This is my first year with a standard brokerage account. All of my previous retirement income, other than pensions, came from IRA and Roth brokerage accounts.

The amount of taxable SSB is calculated and reported on form 1040 on line 6. The basis for how much is taxable is one half of your SSB plus basically all of your other income from lines 1 through 5. Dividends that you received from your investments are included.

Your Long and Short Term Capital Gains and Losses are then reported on line 7.

It looks like Capital Gains and Losses are not included in the taxation of your SSB calculations. Is this correct?

 

[Gumby]

According to Item 3 on the Social Security taxation Worksheet 1 "Figuring Your Taxable Benefits" found on Page 16 of IRS Publication 915, you add the amount from Line 7 of your Form 1040 in calculating the amount of Social Security subject to taxes. See https://www.irs.gov/pub/irs-pdf/p915.pdf Line 7 of the Form 1040 is capital gains and losses. See https://www.irs.gov/pub/irs-pdf/f1040.pdf

So the answer is "Yes, capital gains are counted in calculating social security taxation."

 

[jebmke]

The calculation is shown on page 32 of the 1040 General Instructions (IRS Pub i1040gi)

 

[Al18]

A link from investopedia on how qualified dividends are taxed https://www.investopedia.com/terms/q/qualifieddividend.asp#:~:text=Qualified%20dividends%20must%20meet%20special,%2C%20maxes%20out%20at%2037%25.

 

[4legsgood]

... It looks like Capital Gains and Losses are not included in the taxation of your SSB...

Does this help - includes NIIT and SSB taxation?:

https://www.irscalculators.com/tax-calculator

 

[Gumby]

A link from investopedia on how qualified dividends are taxed https://www.investopedia.com/terms/q/qualifieddividend.asp#:~:text=Qualified%20dividends%20must%20meet%20special,%2C%20maxes%20out%20at%2037%25.

Qualified dividends are also counted in AGI for calculating the amount of social security that is taxed. Basically, anything you normally think of as AGI plus tax exempt interest, such as municipal bond interest, counts in the calculation.