IRS Tax Tip 2022-22, February 9, 2022 A new tax season has arrived. The IRS reminds taxpayers receiving Social Security
benefits that they may have to pay federal income tax on a portion of those benefits. Social Security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income payments, which aren't taxable. The portion of benefits that are taxable depends on the taxpayer's income and filing status. To determine if their benefits are taxable, taxpayers should take half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends and capital gains.
Fifty percent of a taxpayer's benefits may be taxable if they are:
Up to 85% of a taxpayer's benefits may be taxable if they are:
More information:
Subscribe to IRS Tax Tips Page Last Reviewed or Updated: 14-Mar-2022 Up to 50% or even 85% of your Social security benefits are taxable if your “provisional” or total income, as defined by tax law, is above a certain base amount. Your Social Security income may not be taxable at all if your total income is below the base amount. If you’re married and filing jointly with your spouse, your combined incomes and social security benefits are used to figure your total income. When Is Social Security Income Taxable?To determine when Social Security income is taxable, you’ll first need to calculate your total income. Generally, the formula for total income for this purpose is: your adjusted gross income, including any nontaxable interest, plus half of your Social Security benefits. If you’re married and filing jointly with your spouse, your combined incomes and social security benefits are used to figure your total income. Then you’ll compare your total income with the base amounts for your filing status to find out how much of your Social Security income is taxable, if any. You’ll see that you fall into one of three categories. If your total income is:
How Much of Your Social Security Income is Taxable?Review the list below to determine where your total income falls and how much of your Social Security income is taxable. For:
Are All Kinds of Social Security Income Taxable?All social security benefits are taxable in the same way. This is true whether they’re retirement, survivors, or disability benefits. Take note that Social Security benefits paid to a child under his or her Social Security number (SSN) could be potentially taxable to the child, not the parent. Note: Supplemental Security Income, or SSI, is a non-taxable needs-based federal benefit. It is not part of Social Security benefits and does not figure into the taxable benefit formula. Related TopicsHow much of my Social Security income is taxable?You must pay taxes on up to 85% of your Social Security benefits if you file a: Federal tax return as an “individual” and your “combined income” exceeds $25,000. Joint return, and you and your spouse have “combined income” of more than $32,000.
What is the tax rate for someone on Social Security?NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.
At what age is Social Security no longer taxed?Are Social Security benefits taxable regardless of age? Yes. The rules for taxing benefits do not change as a person gets older. Whether or not your Social Security payments are taxed is determined by your income level — specifically, what the Internal Revenue Service calls your “provisional income.”
How can I avoid paying taxes on Social Security?How to minimize taxes on your Social Security. Move income-generating assets into an IRA. ... . Reduce business income. ... . Minimize withdrawals from your retirement plans. ... . Donate your required minimum distribution. ... . Make sure you're taking your maximum capital loss.. |