TAX season is approaching, with the IRS set to accept tax returns from January 24.
Are Social Security benefits taxable?
Yes, some households must pay federal income tax about their Social Security benefits.
This usually happens if you have substantial income other than your benefits – for example wages, self-employment income, interest, dividends or other taxable income.
However, Supplemental Security Income (SSI) is never taxed.
How much do you have to pay?
Not everyone pays the same amount of tax on Social Security benefits because it depends on a person’s income.
If your gross income is more than $25,000 for an individual or $32,000 for a couple filing jointly, you must pay federal income tax on your Social Security benefits.
The portion of your benefits that are taxable varies with income level, we explain:
File a federal tax return as an “individual” and your income is:
- Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits.
- Over $34,000, up to 85% of your benefits may be taxable.
File a joint return, and you and your spouse have a combined income of:
- Between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits.
- More than $44,000, up to 85% of your benefits may be taxable.
What Social Security form will you need to file your taxes?
Your benefits statement or form SSA-1099 can be used to find out if your benefits are taxable.
This form is usually mailed out annually in January to Social Security recipients.
It shows the total amount of benefits you received from Social Security in the previous year so you know how much Social Security income to report to the IRS on your tax return.
Which states do not tax Social Security?
Social Security benefits may be taxed at the state level, but not all states do.
Here is a list of 37 states that don’t tax Social Security benefits:
- New Hampshire
- New shirt
- New York
- North Carolina
- South Carolina
- South Dakota
If you happen to live in one of 13 states not on the list – you may be wondering if you will face taxes.
Some states may issue taxes on your Social Security check depending on your adjusted gross income.
For example, people living in Kansas will need to pay taxes on their benefits if their AGI is $75,000 or more.
You can check with your revenue department to see if you may owe tax on your Social Security payments – if your state isn’t on the list above.
The Sun explains how Social Security claimants can get an extra $841 a month in other benefits and advice on how to deal with inflation.
https://www.the-sun.com/money/4450744/social-security-tax-things-to-know/ Four things to know about Social Security taxes