Some people have to pay federal income taxes on the Social Security benefit they receive. Typically, this occurs only when individuals receive benefits and have other substantial sources of income from wages, self-employment, interest, dividends and/or other taxable earnings that must be reported on your tax return.
In accordance with Internal Revenue Service (IRS) rules, you won't pay federal income tax on more than 85% of your Social Security benefits. The percentage of benefits for which you will owe income tax is dependent upon your filing status and combined income. If you:
- File a federal tax return as an "individual" and your combined income is
- Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits
- More than $34,000, up to 85% of your benefits may be taxable.
- File a joint return, and you and your spouse have a combined income that is
- Between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits
- More than $44,000, up to 85% of your benefits may be taxable.
- Are married and file a separate tax return, you will probably owe taxes on your benefits.
Note: the IRS defines combined income as your adjusted gross income, plus nontaxable interest, plus of your Social Security benefits. You will receive a Social Security Benefit Statement (From SSA-1099) each January detailing the amount of benefits you received during the previous tax year. You can use this when you complete your federal income tax return to determine if you owe income tax on your benefits. If you do owe 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.
Learn why receiving Social Security survivor benefits on behalf of children does not affect income tax for a surviving parent ...
The year you choose for collecting your social security will play a large part in determining how much money you'll receive ...
Find out why you may not have Social Security benefits available to you when it's time to retire.
Under survivor benefits, Social Security provides income for the families of workers who die. If you die, certain family ...
A law enacted by President Franklin D. Roosevelt in 1935 to create ...
A test used to determine whether an insurance product can be ...
A test method used to determine whether a financial product can ...
The section of the United States Internal Revenue Code that defines ...
Elder care, sometimes called elderly care, refers to services ...
An annuity option in which the amount of income payments received ...