How Much of My Social Security is Taxable?

Social Security benefits are generally subject to federal income tax, but the amount of tax you owe depends on your income level. If you have other sources of retirement income, such as a 401(k) or a part-time job, you should expect to pay some income taxes on your Social Security benefits. However, if you rely exclusively on your Social Security checks, you probably won’t pay taxes on your benefits.

How to Calculate Your Taxable Social Security Income

To determine how much of your Social Security income is taxable, you need to calculate your “combined income.” This is your adjusted gross income (AGI) plus nontaxable interest income plus half of your Social Security benefits.

If your combined income is above a certain limit, you will need to pay at least some tax on your Social Security benefits. The limit for 2023 and 2024 is $25,000 if you are a single filer, head of household, or qualifying widow or widower with a dependent child. The 2023 and 2024 limit for joint filers is $32,000. However, if you’re married and file separately, you’ll likely have to pay taxes on your Social Security income.

Tax Rates on Social Security Benefits

If your Social Security income is taxable, the amount you pay will depend on your total combined retirement income. However, you will never pay taxes on more than 85% of your Social Security income.

• Single filers:

  • If your combined income is less than $25,000, you won’t have to pay taxes on your Social Security benefits.
  • If your combined income is between $25,000 and $34,000, you must pay income taxes on up to 50% of your Social Security benefits.
  • If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.

• Married couples filing jointly:

  • If your combined income is less than $32,000, you won’t have to pay taxes on your Social Security benefits.
  • If your combined income is between $32,000 and $44,000, you must pay income taxes on up to 50% of your Social Security benefits.
  • If your combined income is more than $44,000, you will pay taxes on up to 85% of your Social Security benefits.

How to File Social Security Income on Your Federal Taxes

Once you calculate the amount of your taxable Social Security income, you will need to enter that amount on your income tax form. Luckily, this part is easy.

1. Find the total amount of your benefits. This will be in box 3 of your Form SSA-1099.
2. On Form 1040, write the total amount of your Social Security benefits on line 5a and the taxable amount on line 5b.

State Taxes on Social Security Benefits

In addition to federal income taxes, you may also have to pay state income taxes on your Social Security benefits. There are 12 states that collect taxes on at least some Social Security income:

• Colorado
• Connecticut
• Kansas
• Minnesota
• Missouri
• Montana
• Nebraska
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

The other 38 states and plus Washington, D.C. do not tax Social Security income.

How to Reduce Your Social Security Taxes

There are a few things you can do to reduce your Social Security taxes:

• Contribute to a Roth IRA. Roth IRA contributions are made with after-tax dollars, so they are not taxed when you withdraw them in retirement. This can help to reduce your combined income and lower your Social Security tax liability.
• Make catch-up contributions to your retirement accounts. Individuals aged 50 years or older can make annual catch-up contributions to their 401(k) and IRA accounts. These contributions are also made with after-tax dollars, so they can help to reduce your combined income and lower your Social Security tax liability.
• Request voluntary withholding from your Social Security benefits. You can request that the Social Security Administration withhold taxes from your monthly benefits. This can help to ensure that you don’t owe a large tax bill when you file your tax return.

Social Security benefits can be a valuable source of retirement income, but it’s important to understand how they are taxed. By following the tips above, you can reduce your Social Security tax liability and maximize your retirement savings.