Social Security retirement benefits by themselves are generally not taxable – but people with even a modest amount of income in addition to their Social Security payments may end up having to pay taxes on their benefits.
The tax result is determined by something called “combined income,” which is one-half of your Social Security income plus all your additional income (including non-taxable interest).
For married couples, if your combined income is between $32,000 and $44,000, you may have to pay tax on up to 50 percent of your benefits. If your combined income is more than $44,000, up to 85 percent of your benefits may be taxable.
For single filers, Social Security may be taxable up to 50 percent if your combined income is between $25,000 and $34,000, and up to 85 percent if your combined income is above $34,000.
If you owe tax on your Social Security benefits, you can either make quarterly estimated tax payments or ask the government to withhold taxes from your Social Security checks.
You can find more information in the IRS’s Publication 554, Tax Guide for Seniors, and Publication 915, Social Security Benefits and Equivalent Railroad Retirement Benefits. These are available at www.irs.gov or by calling (800) 829-3676.
If you have further questions about your Social Security benefits, you can contact Attorney Kristina Vickstrom in Worcester at 508-757-3800 to set up a consultation.