Do I owe taxes?

In My Humble Opinion
1

This could go in Factual Questions but I’m asking here because it seems less than urgent. My accountant, a perfectly respectable competent guy who has done my taxes for the past five years, tells me that I don’t need to file. I didn’t make enough money in 2024. I’m going to take his word for it and not file a return.

But as happy as I am to hear this news, it strikes me as weird. I earned towards the max payout that Social Security issues, I am not a veteran, disabled or in any other way entitled to special consideration, and I fully expected to pay a pittance in taxes. Maybe a pittance and a half.

This is the first year that I showed only SS money on my return. Can this country run if people like me pay no money in federal taxes? Not complaining, mind you–it just strikes me as a bit odd. I always thought that some SS money–10,000 or 15,000 or some figure–is tax-free but the rest gets taxed. Apparently not.

2

The formula is:

Combined Income =
:check_box_with_check: Adjusted Gross Income (AGI, not including Social Security)
:plus: :check_box_with_check: Nontaxable interest (like municipal bond interest)
:plus: :check_box_with_check: ½ of your Social Security benefits

Individual filer:

If combined income ≤ $25,000 → no tax on Social Security benefits
$25,001 – $34,000 → up to 50% of benefits taxable
Over $34,000 → up to 85% of benefits taxable

So if you have no other income and no interest income and you had $50,000 of Social Security income that would count as $25,000 since they only count half of it.

Thus resulting in no tax since you are not above the $25,000 combined income level.

3

Good info just above.

But lets assume you have a few hundred in interest or dividends. If you still end up below 25K total you don’t owe tax on any of your SS. But you do on the interest & dividends.

But …
The next thing that happens is you subtract the standard deduction of 14,600 and also the over age 65 deduction of $1950. For a total of 16550. So if your AGI was a few hundred and you substract 16 grand, the result is (less than) zero. That’s your “taxable income”: zero.

4

So did your accountant show you their calculations?

5

Finally, he did. I guess he figured that was the only way to shut me up when he’s swamped by clients demanding he sell off their entire equities holdings.

6

Even if you don’t owe taxes, shouldn’t you file a return stating your income (not much) and what you owe (goose egg) ?

7

Is your accountant also a money manager?

8

Primarily a money manager. He does my taxes for free as a side benefit of parking my equities with him. It’s a busy week for him, I imagine.