Callers ask hotline about taxes on Social Security

Posted Monday, Feb. 11, 2013  comments  Print Reprints

Topics: Retirement



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Seniors curious about tax liability on Social Security benefits and younger taxpayers wondering how to claim a college tuition credit were among those seeking advice in the Star-Telegram's annual CPA tax hotline Sunday.

More than a dozen members of the Fort Worth Chapter of the Texas Society of CPAs took calls for four hours, answering questions on a range of issues.

Because of late congressional action to avoid the fiscal cliff last month, the early tax filing season has been delayed this year. Some IRS forms, including those for depreciation and amortization, are not yet available, which is holding up business filers, said Michaela J. Cromar, a senior tax manager with Sanford, Baumeister & Frazier in Fort Worth.

Still, "people are way ahead of last year in getting us" their tax documents, she said. But now they must wait.

Jeffery L. Eaton, an accountant with Spillar, Mitcham, Eaton & Bicknell in Fort Worth, said several callers who went back to school asked about education tax credits. He said the American Opportunity Tax Credit, which was included in the economic stimulus bill passed by Congress in 2009, can provide a credit up to $2,500 for taxpayers or any dependent attending college.

He did tell one grandparent, however, that they could not use the credit for a grandchild who is not a dependent -- even if they're paying the tuition.

Field Lange of Lange & Associates in Fort Worth said he told senior callers that up to 85 percent of Social Security benefits can be taxable, but only if they report enough income to trigger tax liability. Many seniors with only Social Security income don't have to file returns.

Other issues raised by callers included how to figure a depletion allowance on natural gas royalties and whether a legal discrimination settlement is taxable. (Yes, it is.)

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