Is Your Social Security Benefits Taxable?
Photo by Mikhail Nilov
Social security is a financial program funded by federal insurance program in America. It provides financial assistance to qualified individuals. Three benefits it provides include monthly payments to retirees, disability benefits, and survivor benefits. Supplemental Security Income (SSI) payments are not included and are not taxable.
Retirement benefits are available to people that work many years and paid into the system by accruing enough credits. Disability benefits are social security disability insurance (SSDI) and SSI. It provides an income for disabled, blind, or people 65 or older. Survivor benefits provide an income for the family members of a worker that qualified for social security benefits and would have received it had they not died. You are qualified for retirement benefits if you worked and paid into the system for numerous years. Form SSA-1099 will show net benefit amount reported in Box 5.
Sometimes, a portion of your social security may be taxable. Unless it is the only source of income, it would not be taxable and you may not have to file a tax return. All retirement funds, pension funds, interest, dividends are used to determine your yearly income and used to determine if your social security benefits will be taxed or not.
Are My Social Security Benefits Taxable?
Whether or not your social security benefits are tax will depend on additional income you received and your filing status. Up to 85% of your benefits may be taxable. Your taxable benefit amount is determined by using one-half of your social security benefit amount, plus all other income. If it is calculated that the total is more than your base amount, part of your benefit may be taxable if you fall into one the following categories:
Filing status Base amount
Single $25,000
Head of household $25,000
Qualifying surviving spouse
$25,000
Married filing separately and lived
APART from your spouse for
ALL of year $25,000
Married filing jointly $32,000
Married filing separately and lived
WITH spouse at any time during
the year $0
To further explain for example, if you are single and over 65 and your Form SSA-1099 shows an amount of $1,500 in Box 5, half of that amount is $750 and your other incomes are $16,000 for pension and $700 in interest, your benefits would not be taxable because your income of $17,450 would not be more than your base amount of $25,000 for single.
$16,000 (pension)
+ 750 (half of social security)
+ 700 (interest)
equals $17,450
Although your social security benefits are not taxable for this example, you still have to file your taxes because your total gross income of $17,450 is taxable and qualifies you to file a tax return because your income is at least $16,550 for 65 and older and filing status of single category.
Information in this article is intended for educational purposes to provide general tax information; it does not provide you with tax advice or law. We do not provide specific counsel to you on deductions, business income or expenses. It is recommended to seek your tax professional or consultant on your specific tax and/or financial matters.
Information derived from Your Federal Income Tax (2024).