Taxpayer asks:
Dear Taxgirl,
Is my Social Security check taxed?
Thank you.
Taxgirl says:
This is a tough question to answer without knowing more about your situation, including your other income. Here’s the general answer with respect to the taxability of Social Security: once you reach retirement age, whether your Social Security payments are taxable depends on your filing status and how much other income you receive.
To figure that out, you’ll need to grab your form SSA-1099 as well as any forms W-2, 1099, K-1, or other supporting documents related to your income for the year. Focus on the federal form SSA-1099 first – that reports your total Social Security benefits.
- If your only source of income is Social Security benefits, your benefits are generally not taxable. You may not even need to file a return (for more on whether you need to file, click here.)
- If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income (MAGI) is more than the base amount for your filing status. The quick and dirty version of the MAGI formula is to add one-half of the total Social Security benefits you received (that’s what is reported on the form SSA-1099) to all your other income, including any tax-exempt interest and other exclusions from income. Then, compare that total – your MAGI – to the base amount for your filing status.
The base amounts (which are never adjusted for inflation) are:
- $32,000 for taxpayers who file as married filing jointly;
- $25,000 for taxpayers who file as single, head of household, qualifying widow/widower with a dependent child, or married filing separately who did not live with their spouses at any time during the year; and
- $0 for married persons filing separately who lived together during the year.
If the total of your MAGI is more than the base amount for your filing status, some of your benefits may be taxable.
Here’s a quick example. Let’s say you’re a single taxpayer with Social Security benefits in the amount of $15,600. Let’s say you have $1,000 in dividends, $1,000 in taxable interest and $6,000 in other income. Your MAGI is: $15,800 = $7,800 (1/2 of SS benefits) + $8,000 (dividends, taxable interest and tax-exempt interest). Since that total is less than $25,000 (the base amount for your filing status), your Social Security benefits are not taxable.
Here’s another example: Let’s say you’re a single taxpayer with Social Security benefits in the amount of $20,000. Let’s say you have $10,000 in dividends, $10,000 in taxable interest and $12,000 in other income. Your MAGI is: $42,000 = $10,000 (1/2 of SS benefits) + $32,000 (dividends, taxable interest and tax-exempt interest). Since that total is more than $25,000 (the base amount for your filing status), part of your Social Security benefits are taxable.
If some of your Social Security benefits are taxable, how much is taxable depends on the total amount of your benefits and your other income. As a rule, the higher your total income, the higher percentage of your Social Security benefits that are subject to tax.
Generally, up to 50% of your benefits will be taxable. However, up to 85% of your benefits can be taxable if your MAGI is more than $34,000 ($44,000 if you are married filing jointly) or if you are married filing separately and lived with your spouse at any time during 2015. You can figure the actual amount using Worksheet 1, found in Pub 915.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
