Whether your Social Security is taxed depends on your other income

Not all of your Social Security income is taxable. The amount that counts as taxable income depends on your combined income — which includes your Social Security benefits, wages, interest, dividends, and other sources. The IRS uses a formula based on income thresholds to determine how much of your benefit is subject to federal income tax.

If Social Security is your only income source, you typically will not owe federal income tax on it. But if you have other income — from a job, a pension, investments, or rental property — some or all of your Social Security may become taxable. This can happen even if your total income seems modest, because the thresholds are relatively low and have not changed since 1984.

Key Takeaways

  • Your combined income (Social Security plus all other income) determines whether any of your benefits are taxable, using thresholds set by the IRS.
  • Single filers with combined income between $25,000 and $34,000 may have up to 50 percent of benefits taxed; above $34,000, up to 85 percent may be taxed.
  • Married couples filing jointly have thresholds of $32,000 to $44,000 for the 50 percent bracket and above $44,000 for the 85 percent bracket.
  • You can estimate your tax liability using the IRS worksheet in Publication 915, or ask a tax preparer to calculate it for you.
  • Some states do not tax Social Security income at all, while others tax it under their own rules regardless of federal taxation.

How the IRS calculates taxable Social Security

The IRS uses a two-step calculation based on your combined income. Combined income is defined as your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. This number determines which tax bracket you fall into.

If your combined income is below the first threshold, none of your Social Security is taxable. If it exceeds the first threshold, you move into the 50 percent bracket — meaning up to half of your benefits above that threshold may be taxed. If your combined income exceeds the second, higher threshold, you move into the 85 percent bracket — meaning up to 85 percent of your benefits may be taxed.

The actual calculation is more complex than straightforward multiplying your benefits by a percentage. The IRS worksheet in Publication 915 walks through the steps. Many people find it easier to have a tax preparer or accountant do this calculation, especially if they have multiple income sources or are unsure whether they owe tax.

Income thresholds for single filers

If you file as single, your thresholds are:

  • Combined income of $25,000 or less: no Social Security is taxable.
  • Combined income between $25,000 and $34,000: up to 50 percent of your benefits may be taxed.
  • Combined income above $34,000: up to 85 percent of your benefits may be taxed.

These thresholds have remained the same since 1984, even though the cost of living and average benefit amounts have risen significantly. This means more beneficiaries fall into the taxable brackets each year, even without a change in their actual circumstances.

Income thresholds for married couples filing jointly

If you file as married filing jointly, your thresholds are higher:

  • Combined income of $32,000 or less: no Social Security is taxable.
  • Combined income between $32,000 and $44,000: up to 50 percent of your benefits may be taxed.
  • Combined income above $44,000: up to 85 percent of your benefits may be taxed.

If you are married but file separately, the thresholds are much lower — effectively $0 to $9,000 for the 50 percent bracket and above $9,000 for the 85 percent bracket. Filing separately is rarely advantageous for Social Security taxation purposes.

What counts toward your combined income

Combined income includes more than just wages. It includes:

  • Wages from employment.
  • Net income from self-employment.
  • Interest income (including tax-exempt interest).
  • Dividend income.
  • Capital gains.
  • Pension or annuity payments.
  • Rental income.
  • Income from a business or farm.
  • Half of your Social Security benefits themselves.

Some income sources do not count: Supplemental Security Income (SSI), Veteran's benefits, workers' compensation, and certain other payments are excluded from the combined income calculation. If you are unsure whether a particular income source counts, ask your tax preparer or contact the IRS directly.

How to estimate your tax liability

You can estimate whether you owe tax on your Social Security by gathering your income documents and using the IRS worksheet. Publication 915, "Social Security and Equivalent Railroad Retirement Benefits," contains the official worksheet and step-by-step instructions. You can read it free from the IRS website or request a printed copy by phone.

If the calculation seems complex or you have multiple income sources, a tax preparer can do this work for you. Many offer free or low-cost preparation through programs like the Volunteer Income Tax information (VITA) program, which serves people with incomes below a certain threshold. You can find a VITA site near you through the IRS website.

Social Security also sends you a Form SSA-1099 each January showing the benefits you received in the previous year. This form is what you use to report your benefits on your tax return. Keep it with your tax documents.

State taxation of Social Security

Federal taxation and state taxation are separate. Some states do not tax Social Security income at all, regardless of whether the federal government does. Other states follow the federal rules, and a few have their own rules that may result in taxation even when federal tax does not explore.

The states that do not tax Social Security income include Alabama, Alaska, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. However, state tax law changes, so check your state's tax authority website or ask a tax preparer to confirm the current rules for your state.

Frequently Asked Questions

If I have very little other income, will any of my Social Security be taxed?

Only if your combined income exceeds the first threshold for your filing status. If you are single with combined income under $25,000, or married filing jointly with combined income under $32,000, none of your Social Security is taxable. Combined income includes half of your Social Security benefits, so the actual threshold is higher than it first appears.

Can I reduce my taxable Social Security by taking less of it?

Not in a way that helps with taxes. If you delay claiming Social Security, your future benefit amount will be higher, but you cannot choose to receive only part of your benefit to stay below the tax threshold. You either claim your full benefit or do not claim it yet.

What happens if I do not pay tax on Social Security I owe tax on?

The IRS will assess penalties and interest on the unpaid amount. If you discover you owe tax on a prior year's return, you can file an amended return using Form 1040-X. It is better to address it yourself than to wait for the IRS to contact you.

Do I have to file a tax return if only Social Security is taxable?

If Social Security is your only income and none of it is taxable, you generally do not have to file. But if some of it is taxable, you must file a return to report and pay the tax owed, even if no tax was withheld from your benefits.

Can I have taxes withheld from my Social Security to avoid a big bill at tax time?

Yes. You can request federal income tax withholding on your Social Security benefits by completing Form W-4V and submitting it to your local Social Security office. You can choose to have 7, 10, 12, or 22 percent of your benefit withheld each month. This does not change how much is taxable — it just spreads the tax payment throughout the year.