If you receive Social Security benefits did you know that you can have income tax voluntarily withheld from your check? By signing up for Voluntary Tax withholding it could make next years tax liability easier to swallow. Here is how it works. Your Social Security benefits are not exempt from Federal Income tax. If you find yourself in a tax bracket where you are required to pay each year, voluntary tax withholding could be right for you. By requesting a form W4-V from Social Security you can specify a percentage of your benefit check to be withheld for Federal Income Tax. At the end of the year you will receive a Form 1099 from Social Security showing how much was withheld; you will be able to apply this amount towards your tax liability. When you receive the form W4-V from Social Security, you will need to specify the percentage you want withheld. The choices available are zero percent (to stop withholding), seven percent, ten percent, fifteen percent, and twenty five percent. The form comes with a return envelope and once Social Security receives your form it takes them thirty to sixty days to process your request. You will receive a letter from Social Security notifying when the withholding will begin. Signing up for voluntary tax withholding could make your tax liability less of burden each year. |
