| Social Security column/Karyl Richson On Medicare prescription program and withholding tax |
| REMINDER: Extra help still available with new Medicare prescription drug program costs |
| There is still time for Medicare beneficiaries to enroll in the new Medicare Prescription Drug Program. The initial enrollment period for the program runs until May 15, 2006. And for those with limited incomes and resources, there is still time to apply for extra financial help with the costs of premiums, deductibles, and co-payments. To qualify for the extra help, an individual must have total annual income below $14,355 and resources valued below $10,000. The limits for a married couple living together are higher: $19,245 in combined annual income and $20,000 in resources. These resources can be slightly higher -- an additional $1,500 per person -- if you will be using some of your money for burial expenses. Even if your income is higher, you still may be able to get some help if, for example, you or your spouse supports other family members who live with you, if you have earnings from work, or if you live in Alaska or Hawaii. Social Security is taking the applications for extra help. You can apply for the extra help online at www.socialsecurity.gov or you can call Social Security toll-free at 1-800-772-1213 (TTY 1-800-325-0778). Representatives are available Monday through Friday from 7 a.m. to 7 p.m. Tell the representative that you want to apply for the Help with Medicare Prescription Drug Plan Costs. Applying for extra help with Social Security is separate from selecting a Prescription Drug Plan. Even if you are approved for extra help, you still need to select the plan that best meets your needs. If you apply and qualify for the extra help but don't join a plan, Medicare will enroll you in one by May 15, 2006, to make sure you get this important coverage. Of course, you do not have to be eligible for the extra help to join a Prescription Drug Plan. The extra help is in addition to the potential savings you may receive if you join a plan. To get more information about the plans, what drugs are covered and the costs involved, you can contact the providers, Medicare, or state and local organizations. Medicare has a toll-free number where representatives can answer questions by calling 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. The Internet site -- www.medicare.gov -- also has information and an online enrollment center to assist you. ----------------------------------------- Consider having taxes withheld from Social Security benefits If you are among the more than 15 million people receiving Social Security benefits who must pay taxes on these benefits, here is a suggestion: have your federal taxes automatically withheld from your monthly payments. Here are the basics on what you need to know. The law states that individuals must pay federal taxes if they have total income of more than $25,000, and married couples must pay federal taxes on total income of more than $32,000. People whose only source of income is Social Security generally don't pay taxes. However, if you have other income, such as a pension, wages, interest, dividends or other taxable income, this added to your benefits could render a portion of your benefits taxable. For individual tax filers, if your income is between $25,000 and $34,000, you may have to pay tax on up to 50 percent of your benefits; if your income is more than $34,000, up to 85 percent of your benefits may be taxable. For couples filing jointly, if your combined income is between $32,000 and $44,000, you may have to pay tax on up to 50 percent of your benefits; if your combined income is more than $44,000, up to 85 percent of your benefits may be taxable. Although you are not required to have federal taxes withheld from your monthly benefits, you may find it easier than paying quarterly estimated tax payments. If you are interested in taking the easy automatic withholding route to paying taxes, here is what you need to know. Simply complete IRS form W-4V, Voluntary Withholding Request, which is also available on Social Security's Web site at www.socialsecurity.gov. Select the percentage of your monthly benefit amount you want withheld: 7, 10, 15 or 25 percent. Then sign and return the form to Social Security. Of course, if your estimate is off, it will be adjusted when you file your federal income tax return. For more information, visit our web page, How to Have Federal Taxes Withheld from Your Social Security Benefit, at www.socialsecurity.gov/taxwithhold.html or call us at 1-800-772-1213 (TTY 1-800-325-0778) and ask for the booklet, Social Security -- What You Need to Know When You Get Retirement or Survivors Benefits. Karyl Richson is the Social Security Public Affairs Specialist in Milwaukee, WI. |
 |
 |
| March 2006 Preview |