Dear Liz: Because of the Social Security Fairness Act, my wife got a huge lump sum check (catchup, I suppose) and will now get monthly Social Security benefits.

This is good news and bad news, especially if we get kicked into a higher tax bracket and moreover if we have to pay taxes on that lump sum.

Is there anything in the wings at the IRS that will provide some guidance as to the taxable or nontaxable (ha-ha) nature of that lump sum?

Answer: Taxes on Social Security are typically based on your “combined income” for the year. Combined income is your adjusted gross income plus any tax-exempt interest and half your Social Security benefit. If you’re married filing jointly and your combined income is between $32,000 and $44,000, you typically would pay tax on up to 50% of your benefits

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