Ask Rusty – Must I Pay Income Tax on Social Security Benefits?
Dear Rusty: I do not recall the rules on my income tax obligation for Social Security benefits. Can you please explain these rules to me? Signed: Senior Taxpayer
Dear Senior Taxpayer: I’ll be happy to review the rules about income tax on Social Security benefits for you. If your combined income from all sources is low enough, your Social Security benefits aren’t subject to being taxed by the IRS. But some of your Social Security benefits will become taxable if your combined income from all sources exceeds certain thresholds, and the thresholds are dependent on your tax filing status (single or married).
If you file your income tax as “married-filing jointly” and your combined income from all sources (both taxable and non-taxable income) is less than $32,000, then your Social Security benefits aren’t taxable. But if your combined income as a married couple is between $32,001 and $44,000, then half of the SS benefits you received during the tax year becomes part of your taxable income. And if your combined income as a married couple exceeds $44,000 then up to 85% of the SS benefits you received during the tax year becomes part of your taxable income. Those SS benefits will simply be included as part of your taxable income and taxed at whatever your normal IRS tax rate is.
See more in this weeks Boone County Journal