Some individuals may need to pay federal income taxes on their Social Security benefits, depending on their total income. This usually happens when there is substantial additional income from sources such as wages, self-employment, interest, dividends, or other taxable income.
According to the Internal Revenue Service (IRS) rules, only 85 percent of Social Security benefits are subject to taxation. The percentage of benefits subject to tax depends on the individual's filing status and combined income.
- For single individuals, if the combined income falls between $25,000 and $34,000, up to 50 percent of the benefits may be taxable. If the combined income exceeds $34,000, up to 85 percent of the benefits may be taxable.
- For married couples filing jointly, the income thresholds are $32,000 to $44,000.
- For married individuals filing separately, they will likely have to pay taxes on their benefits. The combined income is calculated by adding the adjusted gross income, nontaxable interest, and half of the Social Security benefits.
Each January, you should receive a Social Security Benefit Statement (Form SSA-1099) that shows the previous year's benefit amount. You can use this statement when filing the federal income tax return to determine if your benefits are taxable. In case you lose or don't receive the form, you can find a copy through your online Social Security account.
If you owe taxes on your Social Security benefits, you have two options:
- You can make quarterly estimated tax payments to the IRS, OR
- You can choose to have federal taxes withheld directly from your benefits.
Last Reviewed: July 6, 2023