Did you sign up for social security benefits last year? If so, you may have questions about how those payments are taxed on your federal income tax return.
How Social Security Is Taxed
The good news is, the formula is the same as it was in prior years. That’s also the bad news, because the thresholds for determining taxability are not indexed for inflation, and did not change either. Those thresholds, or “base amounts,” remain at $32,000 when you’re married and file a joint return, and $25,000 when you’re single.
Amount of SS Benefit That Is Taxable
How much of your social security benefit is taxable? To determine the answer, calculate your “provisional income.”
Your “provisional income” is composed of the following:
- Your adjusted gross income plus tax-exempt interest
- Certain other exclusions
- One-half of the social security benefits you received
When you’re married filing jointly, your benefits are 50% taxable if your provisional income is between $32,000 and $44,000. If your provisional income is more than $44,000, up to 85% of your benefits may be taxable. For singles, the 50% taxability range is $25,000 to $34,000.
TAX ADVICE AND LEGAL DISCLAIMER: All content included on this website including attachments, is not meant to be used and cannot be used as tax advice or legal advice nor can it be used to avoid penalties that may be imposed under the Internal Revenue Code or applicable law, nor may any content here be used to promote to another party any matter addressed by or on this website.