Social Security Benefits and Income Tax

Do I have to pay taxes on my Social Security benefits? This is a common question this time of year. Generally you only have to pay taxes if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

Each January you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax.

The general guidelines are as follows:

  • For “individual” filers
    • If you have income under $25,000 you do not have to pay taxes on your benefits.
    • If you have income between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • If you have income more than $34,000, up to 85 percent of your benefits may be taxable.

 

  • For “joint” filers
    • If you and your spouse have combined income under $32,000 you do not have to pay taxes on your benefits.
    • If you and your spouse have combined income between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
    • If you have your spouse have combined income more than $44,000, up to 85 percent of your benefits may be taxable.

 

If you do have to pay taxes on your Social Security benefits, you can make quarterly estimated tax payments to the IRS or choose to have federal taxes withheld from your benefits.

Taxes