If the only income you received during 2004 was your social security or equivalent railroad retirement benefits, your benefits are probably not taxable and you probably will not have to file a tax return.

If you also received other income, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status. Your taxable benefits and modified adjusted gross income are figured in a worksheet in the Instructions for Form 1040 or Instructions for Form 1040A. But, before you go to the instruction book, do the following quick computation to determine whether some of your benefits may be taxable. First, add one–half of the total social security or equivalent railroad retirement benefits you received to all your other income, including any tax exempt interest and exclusions from income. Then, compare this total to your base amount. Your base amount is one of the following:

$25,000 if you are single, head of household, or qualifying widow or widower with a dependent child;

$25,000 if you are married filing separately and did not live with your spouse at any time during the year;

$32,000 if you are married and file a joint return; or

Zero if you are married filing separately and lived with your spouse at any time during the year.

If this total is less than your base amount, none of your benefits are taxable.

To make a determination, complete the social security benefits worksheet in the Form 1040 or 1040A instruction book.

The taxable benefits, if any, must be included in the gross income of the person who has the legal right to receive them. For example, if you and your child received benefits, but the check for your child was made out in your name, you must use only your own portion of the benefits in figuring if any part is taxable to you. Half of the portion that belongs to your child must be added to your child's other income to determine if any of those benefits are taxable to your child.

If you are married and file a joint return, you and your spouse must combine your incomes, social security benefits, and equivalent railroad retirement benefits when figuring the taxable portion of your benefits.

If part of your benefits is taxable, enter both the total amount and the taxable amount of the benefits received on Form 1040(PDF) or Form 1040A(PDF). You cannot use Form 1040EZ(PDF).

You should receive your 2004 Form SSA–1099 or Form RRB–1099 by January 31, 2005. The form will show benefits paid to the person who has the legal right to receive them, and the amount of any benefits you repaid in 2004. It will also show amounts by which the benefits were reduced because you received workers compensation benefits. The Substitute Workers Compensation benefits would be taxable to the same extent.

For additional information, refer to Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

If any part of your social security or equivalent railroad retirement benefits will be taxable in 2005, you may need to pay estimated tax. Refer to Topic 355 or Publication 505, Tax Withholding and Estimated Tax for additional information on estimated tax.