Did you know that if you are receiving Social Security benefits, you may have to pay federal income tax on a portion of these benefits? The amount you have to pay may depend on your specific income and filing status.
To find out whether your Social Security benefits are taxable – if you are single, take one-half of the Social Security money you received throughout the year and add it to your other income, which includes pensions, wages, interest, dividends, and capital gains. If the total comes to more than $25,000, then part of your benefits may be taxable.
If you are married and filing jointly, take half of the Social Security money you received throughout the year and half of your spouse’s Social Security benefits and add both of those amounts to your combined household income. If the total is more than $32,000, part of your benefits may be taxable.
On its website, the IRS then lays out the percentage of benefits that are taxable, based on the above calculation. These percentages vary between 50 percent and 85 percent and depend on your filing status and income levels. For example, if you are filing single with $25,000–$34,000 income, 50 percent of your Social Security benefits may be taxable.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
Footnotes and Sources
- IRS.gov, March 28, 2023
