Social Security beneficiaries want to know if their benefits are taxable.
Most people won’t have to pay taxes on their benefits, but you may have to if you earn above the threshold.
How will I know if my benefits are taxed?
Some people will have to pay federal income taxes on their Social Security benefits, and others won’t. Whether or not you have to pay is based on your combined income. The limit is $25,000 annually and $32,000 for married couples. If your combined income is at or below the threshold, then you will not have to pay taxes on your Social Security benefit.
People with a combined income between $25,000 and $34,000 (or $32,000 to $44,000 for married couples) per year, the SSA can levy tax on 50% of your benefits. If your income exceeds $34,000 a year (or $44,000 for married couples), you can be taxed on up to 85% of your benefit.
In order to find out if your benefits are taxed, you’ll need to calculate your combined income. The formula to calculate it is:
Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your combined income
If you do need to pay, the SSA will send a benefit statement at the start of each year– Form SSA-1099.