Planning for Life

Do I Need to Pay Income Taxes on My Social Security Benefits?

Posted by Rachel Sandler on February 10, 2014

By Sarah Foster

Many people do not realize that they may need to pay income taxes on their Social Security benefits. (This includes monthly retirement benefits, Social Security Disability Insurance benefits and survivor benefits.) Supplemental Security Income benefits are never taxed.

The good news is that if Social Security benefits are your only income, you will likely be below the taxable level. However, if you have other income, you may have to pay taxes.

If your income is below certain base amounts your Social Security benefits are not taxable. The base amount is: $25,000 if you are single, head of household, or qualifying widow (or widower), $25,000 if you are married filing separately and lived apart from your spouse for the entire year, $34,000 if you are married filing jointly and $0 if you are married filing separately and lived with your spouse at any time during the tax year.

To figure out whether any of your benefits may be taxable, add one-half of your yearly benefits plus all of your other income, including tax-exempt interest for the year. If this amount is higher than your base amount, you will likely need to pay taxes on your benefits.

Note that if you are married and file a joint return, you and your spouse must combine your incomes and social security benefits. Also, if your spouse did not receive any Social Security benefits, you still must add your spouse's income to yours when figuring if any of your benefits are taxable (if you file a joint return).

Topics: social security, special needs planning, income taxes

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