Soc Sec Taxable Wages and Job Change Question

[Covergirl82]

For those more knowledgeable of taxes than me...  DH changed jobs/employers in May 2019.  His pay will exceed (and probably already has at this point) the threshold for Social Security tax to be deducted.  Because he changed employers, I'm guessing that because the payroll system only knows his earnings from his current employer, we can expect to see a refund for SS when we file our 2019 taxes.  Is that correct?  In the past few years, his net pay would go up a few hundred dollars in the last few months of the year...while I would prefer to have that money now, it wouldn't hurt to have a $1,000+ tacked on to our 2019 refund.

[hocus2]

You'll get it as a refund most likely. My DH had the same thing (earning above SS cap and mid year switch) and I believe that is what happened.

However if you end up owing taxes I am not sure how this would play out.

[sometimesrunner]

You're correct--he'll end up over-withheld for the year and the amount of over payment will be added to your refund on your tax return.

[sometimesrunner]

Nov 11, 2019 10:48:57 GMT -5 hocus2 said:

You'll get it as a refund most likely. My DH had the same thing (earning above SS cap and mid year switch) and I believe that is what happened.

However if you end up owing taxes I am not sure how this would play out.

It would reduce the amount owed. 

[jwright]

Yes, the current employer will not adjust for previous earnings. When you file your tax return, any excess social security tax withheld will be treated as additional withholding and would potentially increase your refund (or decrease the amount owed).

If you look at page 2 of the 1040, Line 16 is for federal tax withheld, Line 17 includes taxes from Schedule 5. Schedule 5, Line 72 is where you list excess social security so it will then be included with total payments.

[Covergirl82]

Thank you everyone! Due to the amount of deductions we have to report on our taxes, we have received refunds, so I am anticipating a refund again (especially given that DH took a 10% pay cut when he changed jobs). We are working on paying off our travel trailer, so I just wanted to mentally earmark that money to use to pay down that loan.

[azalea]

Yes, he will receive the refund at tax time. When I switched employers last year I contacted HR to see if I could opt out, since I already hit the max between my two jobs towards the end of the year, and they had no method for addressing this issue. I had to wait until I filed taxes to receive the refund on overpayment.

[mich1]

DH has had this happen, he said you get it back when you file your taxes. Company A doesn't know what Company B has withheld for SS and it all comes together at tax time.