What No One Tells You about Social Security Benefits while Filing Taxes

What No One Tells You about Social Security Benefits while Filing Taxes

The system of receiving Social Security Benefits while Filing Taxes was introduced way back in 1935 when the then President, Franklin Roosevelt, signed the Social Security Act. The current regulations governing Social Security Benefits have been through various amendments since their inception. Currently, under the Social Security Benefits, four different types of benefits are paid. These include retirement benefits, disability benefits, dependents benefits and survivor's benefits.

Though you might know that your Social Security Benefits depend on your level of income and for how long you have worked, there are some facts about such benefits which you might not know. Given below are some common facts which no one tells you about your Social Security Benefits:

Social Security Benefits while Filing Taxes

• The 'full retirement age' depends on the year of your birth
  
  While you might know that receiving your Social Security Benefits are more rewarding from or after you reach your full retirement age, do you know the actual full retirement age. While most of us consider 66 to be the full retirement age, the fact is that the actual age depends on the year we are born. If you are born in 1938 or earlier, your full retirement age is 65 years. If you are born between 1943 and 1954, your full retirement age would be 66 years and if you are born after 1960, the full retirement age is actually 67 years. Did you know this?


• Getting benefits after divorce
  
  If you are divorced from your spouse and want to lay a claim to spousal benefits of your ex-spouse, you have to fulfill three important criteria. One, you should remain unmarried for claiming the benefit. Two, your marriage should have lasted for at least 10 years. Three, your spouse should be retired or disabled. However, if you and your spouse are above 62 years of age and have been divorced for more than 2 years, you can start receiving spousal benefits even if your working spouse has not opted for the same.


• The Social Security Benefits are calculated on your average 35-year income
  
  Though the computation of Social Security Benefits varies as per different situations, one thing is constant. The number of years taken for your aggregate earnings is 35 years. If you have worked for more than 35 years, the highest earning years are considered in the calculation. However, if you have worked for less than 35 years, 'zero' value is taken for such years when your income was nil. This, therefore, reduces the value of the benefits you can receive.


• The difference between spousal and survivor benefits
  
  You get spousal benefits being married or being divorced. In either case, your spouse should be alive. However, if your spouse dies, you get survivor benefits. Spousal benefit is 50% of the Social Security Benefit which your spouse is entitled too while survivor benefit is 100% of that amount. When claiming either benefit, you can get only one– either yours or your spouse's. In case of spousal benefit, if your benefit is more than 50% of your spouse's benefit, you would get the higher amount, i.e. your benefit. The same holds true in the opposite scenario where you would get your spousal benefit. In short, when claiming spousal benefits, you can claim only one benefit and let go of the other. In survivor benefit, though, you can collect your survivor benefit and let your own benefit to grow. If you collect your own benefit after 70 years, you can avail of higher payments.


• Spousal and survivor benefits do not increase after the full retirement age
  
  Though you can increase your Social Security Benefit if you delay receiving it post your full retirement age, no increment is available in case of spousal or survivor benefit. Did you know these things about Social Security Benefits? I bet you didn't. Wise men say that knowledge is power and they are not wrong. You should learn the nutty-gritties of Social Security Benefits too so that you can avail the maximum possible benefits.

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Did you know these tax laws exist? Tax Preparation and Tax Filing from the Best Tax Consultants

Did you know these tax laws exist?

This Article is created and published by Tax Preparation and Tax Filing from the Best Tax Consultants

The tax season is around the corner and I am sure most of you would be in a frenzy to file your taxes at the earliest. Well, good for you. But what if I tell you that you might have missed out on some tax exemptions or deductions while preparing your taxes?
Most Americans consider that the tax laws are a bit complicated and, thus, resort to professionals’ help for preparing and filing their tax returns. Are the laws complicated? They are a bit, yes. Moreover, there are some strange tax laws which most of us are not aware of. Here is a list of such weird federal tax laws. Find out if you have ever heard about them:

Allowance for clay miners
Sagger clay is used in pottery. People who mine this clay get a 14% federal depletion allowance. Quite generous, don’t you think? However, there is a catch to this law. If the clay gets deposited in sewer pipes then the allowance is reduced to 7.5%.

Allowance for shell and rock miners
If you are engaged in extracting oyster shells, clam shells and spodumene mineral, you can also claim the federal depletion allowance of 14%.

Body building, anyone?
Body building can be a lucrative professional choice as the special oils used in preparation of body-building competitions are eligible for tax exemption. You can deduct the cost of these special oils from your taxable income. However, buffalo meat and wheat-grass shots do not qualify for tax exemption and their expenses are included in your taxable income.

It is time to pursue your artistic skills
If you are a performing artist and fulfill some employment conditions, you can claim deductions for expenses incurred during such employment. The employment conditions stipulate that you should be employed by a minimum of 2 employers each paying at least $200, the expenses related to your job should be more than 10% of the income generated from the same job and your adjusted gross income should not be higher than $16, 000. If you fulfill these conditions, enjoy tax exemptions on your job-related expenses.

Breast implants are depreciable
This one takes the cake! If your breast implants are a requirement in your chosen field of work, they are considered as a stage prop. Since the prop is for your business, it comes under the category of business assets which are depreciable over time.

Tax Preparation and Tax Filing

Some weird state tax laws
Yes, even the US states are not far behind in weird tax exemptions and deductions.  Here are some weird tax laws prevalent across some popular US states.

• New York Bagels – if you are in New York and love your bagels, decide how you want to buy them to avoid tax. An uncut bagel is tax exempt. However, if you buy your bagel any other way (like sliced or creamed) you have to part with 8 cents in taxes.
• California and its fruits – buying fruits from kiosks or fruit stalls attracts a 33% tax while buying fruits from the grocery store does not. Strange, isn’t it?
• Arkansas and being natural – if you are in Arkansas and get your body pierced, tattooed or underwent electrolysis, you would have to pay a 6% extra tax. Being natural has its perks, doesn’t it?
• Alabama and Nevada and the playing cards dilemma – as gambling is legal in Nevada, the state gifts you a free deck of playing cards when each return is filed. However, in Alabama, the state charges a 10% on decks with 54 or less playing cards.

With these weird tax laws, it is no doubt that Americans find filing their taxes difficult. With both federal and state tax laws having weird tax deductions or charges, it sometimes becomes difficult to figure out whether you can save tax or have to file an extra tax. The next time you file your taxes, look out for these strange tax deductions and save on your tax outgo.