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Do I have to pay income tax on my Social Security benefits?

The answer is “maybe.”

Some people who get Social Security benefits have to pay income taxes on them. This will apply to you only if you have other substantial income in addition to your benefits (for example, wages, self-employment, interest, dividends and other taxable income that you have to report on your tax return). No one pays taxes on more than 85 percent of his or her Social Security benefits and some pay on a smaller amount, based on these IRS rules:

  • 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 50 percent of your Social Security benefits. If your combined income is above $34,000, up to 85 percent of your Social Security benefits is subject to income tax.
  • If you file a joint return, you may have to pay taxes on 50 percent of your benefits if you and your spouse have a combined income* that is between $32,000 and $44,000. If your combined income is more than $44,000, up to 85 percent of your Social Security benefits are subject to income tax.
  • If you are married and file a separate tax return, you probably will pay taxes on your benefits.

*On your 1040 tax return, your “combined income” is the sum of your adjusted gross income, plus nontaxable interest, plus one-half of your Social Security benefits.

Every 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 statement when you complete your federal income tax return to find out if your benefits are subject to tax. Although you’re not required to have federal taxes withheld from your Social Security benefits, you may find it easier than paying quarterly estimated tax payments.

For more information about your taxes, see Internal Revenue Service (IRS) Publication 554, Tax Guide for Seniors, and Publication 915, Social Security Benefits and Equivalent Railroad Retirement Benefits. Both publications have worksheets to help you figure out whether your benefits would be taxable.

You also can call the IRS toll-free number, 1-800-829-3676, to ask for copies of these publications.

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