The information in this article is up to date for tax year 2023 (returns filed in 2024).
If you’re preparing for retirement, you might be wondering if social security is taxable income. The short answer: Yes. The longer answer: It depends.
Social Security benefits are considered taxable income above a certain income level. But that income threshold is pretty low, so most Americans will be required to pay taxes on 50% to 85% of their benefits, depending on their income.
Here’s what you need to know about your tax liability on social security benefits.
How Much of My Social Security Income Is Taxable?
Social Security income is taxed based on income level—not age. If your income (also called provisional income or combined income) is above $25,000 as an individual or $32,000 as a married couple, you are required to pay federal taxes on that income.
Combined income = your adjusted gross income + any tax-exempt interest income + half of your Social Security benefits.
Here’s a quick breakdown of the different tax rates based on filing status and income level:
| Filing as: | Income: | Tax Rate: |
| Individual | $25,000 to $34,000 | Up to 50% |
| Individual | >$34,000 | Up to 85% |
| Married, filing jointly | $32,000 to $44,000 | Up to 50% |
| Married, filing jointly | >$44,000 | Up to 85% |
The Social Security Administration (SSA) estimates that 56% of beneficiary families owe federal income tax on their benefits. If Social Security is your only retirement income, you likely won’t have to pay taxes on it. According to the SSA, the average monthly Social Security payment in January 2024 was $1,907 for all retired workers–below the threshold for taxation on benefits.
You can use the IRS Interactive Tax Assistant to calculate your taxable income on social security benefits.
Are Spousal, Survivor, Disability, and SSI Benefits Considered Taxable Income?
Social security benefits that may be taxable include monthly retirement, survivor and disability benefits. Supplemental security income (SSI) payments or benefits you received on behalf of a dependent are not taxable income.
How to Pay Social Security Taxes
If you received social security benefits last year, you should get an SSA-1099 form mailed to you in January. This is your Social Security Benefit Statement and will help you determine how much you owe on your federal return. Your benefits information is also available online if you enroll on the Social Security website.
How to pay:
- Make quarterly estimated tax payments to the IRS
- Have your taxes withheld from your benefit checks
To have your taxes withheld, you will need to fill out and submit IRS Form W-4V, Voluntary Withholding Request. The advantage of having your taxes withheld is that you won’t have to pay a large lump sum at tax time, and you won’t have to estimate and keep up with quarterly payments (and risk under- or overpaying).
How to Report Social Security Income on Tax Return
Your net Social Security income is reported on Box 5 of Form SSA-1099, Social Security Benefit Statement. Report your income on line 6a of IRS Form 1040, U.S. Individual Income Tax Return, or IRS Form 1040-SR, U.S. Tax Return for Seniors.
Do I Have to Pay FICA taxes on My Earnings If I Also Collect Social Security?
Yes. If you are working, that income is subject to FICA taxes.
FICA is a federal payroll tax withheld from your paychecks (if you’re a W-2 employee) or paid out through your self-employment taxes (if you’re an independent contractor). Part of the tax goes towards funding Social Security and the other to Medicare.
Note: You can work and still receive Social Security benefits. However, if you are younger than 67 (consider full retirement age) and earn more than $22,320, you may receive reduced benefit amounts.
State Taxes on Social Security Income
Most states don’t tax Social Security income, but a few do. There are currently 12 states that tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.
Each state taxes benefits differently. Contact your own state tax agency to learn more.
How to Reduce Your Social Security Tax Burden
There are a few ways to keep your income below the thresholds for taxation on your Social Security benefits.
- Delay taking Social Security if you are still working (this has the dual benefit of reducing your tax burden and ensuring you have larger benefit payouts when you retire)
- Invest in a Roth IRA. Funds distributed from your Roth IRA are not counted toward your combined income.
- Take larger IRA withdrawals before living on Social Security benefits, and smaller distributions after enrolling in Social Security to minimize taxable income.
- Take a tax deduction on investment losses. If you sell depressed stocks, you can offset capital gains income with those losses up to $3,000.
If you’re preparing for retirement or are paying taxes on other benefits, ezTaxReturn can help. ezTaxReturn offers FREE simple federal returns plus free customer support to answer your biggest tax questions.
File your federal and state taxes online.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
