Is Social Security Income Taxable? (2024 Update) (2024)

Is Social Security Income Taxable? (2024 Update) (1)

Social Security income is generally taxable at the federal level, though whether or not you have to pay taxes on your Social Security benefits depends on your income level. If you have other sources of retirement income, such as a 401(k) or a part-time job, then you should expect to pay some income taxes on your Social Security benefits. If you rely exclusively on your Social Security checks, though, you probably won’t pay taxes on your benefits. Regardless, it can be helpful to work with a financial advisor who can help you understand how different sources of retirement income are taxed.

Are Social Security Benefits (Income) Taxable?

Your Social Security benefits could be taxable, depending on your situation. According to the IRS, the best way to see if you’ll owe taxes on your Social Security income is to take one-half of your Social Security benefits and add that amount to all your other income. This includes tax-exempt interest. This number is known as your combined income, and this is how it’s calculated:

Combined Income = Adjusted Gross Income (AGI) + Nontaxable Interest + 1/2 of Social Security Benefits

If your combined income is above a certain limit (the IRS calls this limit the base amount), you will need to pay at least some tax. The limit for 2023 and 2024 is $25,000 if you are a single filer, head of household or qualifying widow or widower with a dependent child. The 2023 and 2024 limit for joint filers is $32,000. However, if you’re married and file separately, you’ll likely have to pay taxes on your Social Security income.

How to Calculate Your Social Security Income Taxes

If your Social Security income is taxable, the amount you pay will depend on your total combined retirement income. However, you’ll never pay taxes on more than 85% of your Social Security income, though the income brackets will vary by filing status.

If you file your income tax return as an individual with a total income that’s less than $25,000, you won’t have to pay taxes on your Social Security benefits. Single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.

Do you need help figuring out your required minimum distributions? Try SmartAsset’sRMD calculatorto learn more.

For married couples filing a joint return, you’ll pay taxes on up to 50% of your Social Security income if you have a combined income of $32,000 to $44,000. If you have a combined income of more than $44,000, you can expect to pay taxes on up to 85% of your Social Security payments.

If 50% of your benefits are subject to tax, the exact amount you include in your taxable income (meaning on your Form 1040) will be the lesser of either:

  • half of your annual Social Security benefits OR
  • half of the difference between your combined income and the IRS base amount

For example, let’s say you’re a single filer who receives a monthly benefit of $1,827, which is the average benefit for 2023. Your total annual benefits would be $21,924. Then let’s say you have a combined income of $30,000.

Half of your total benefits would be $10,962. The difference between your combined income and the base tax bracket (which is $25,000 for single filers) is $5,000. So the taxable amount that you would enter on your federal income tax form is $2,500, because it’s lower than half of your annual Social Security benefit and is half of the difference between your combined income and the base IRS amount.

The example above is for someone who’s paying taxes on 50% of their Social Security benefits. Things get more complex if you’re paying taxes on 85% of your benefits. However, the IRS helps taxpayers by offering software and a worksheet tocalculate Social Security tax liability.

How to File Social Security Income on Your Federal Taxes

Once you calculate the amount of your taxable Social Security income, you’ll need to enter that amount on your income tax form. Luckily, this part is easy.First, findthe total amount of your benefits. This will be in box 3 of your Form SSA-1099. Then, on Form 1040, youwill write the total amount of your Social Security benefits on line 5a and the taxable amount on line 5b.

State Taxes on Social Security Benefits

Is Social Security Income Taxable? (2024 Update) (2)

Everything above is about your federal income taxes, which comprise the majority of your taxes. Depending on where you live, you may also have to pay state income taxes.

There are 12 states that collect taxes on at least some Social Security income. Two of those states(Minnesota and Utah) follow the same taxation rules as the federal government. So if you live in one of those two states, then you’ll pay the state’s regular income tax rates on all of your taxable benefits (that is, up to 85% of your benefits).

The other states also follow the federal rules, but offer deductions or exemptions based on your age or income. So in those nine states, you likely won’t pay tax on the full taxable amount. The other 38 states plus Washington, D.C. do not tax Social Security income. Here’s a complete breakdown of the states that do and don’t tax Social Security:

State Taxes on Social Security Benefits

Taxed According to Federal RulesMinnesota, Utah
Partially Taxed (Exemptions for Income and Age)Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Vermont, West Virginia
No State Tax on Social Security BenefitsAlabama, Alaska, Arizona, Arkansas, California, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, Wyoming

The Impact of Roth IRAs on Social Security Taxes

If you’re concerned about your income tax burden in retirement, consider saving in a Roth IRA. Unlike many other retirement accounts, you save with after-tax dollars in a Roth IRA. Because you pay taxes on the money before contributing it to your Roth IRA, you will not pay any taxes when you withdraw your contributions.

You also don’t have to withdraw the funds on any specific schedule after you retire. This differs from distributions in traditional IRAs and 401(k) plans. These insteadrequire you to begin withdrawals once you reach 72 or 73 years old, depending on when you turn 72 (if you turn 72 in 2023 or 2024, then your age is 73).

So, when you calculate your combined income for Social Security tax purposes, your withdrawals from a Roth IRA won’t count as part of that income. That could make a Roth IRA a great way to increase your retirement income without increasing your taxes in retirement.

Many retirement plans also allow individuals aged 50 years or older to make annual catch-up contributions. You can make catch-up contributions of up to $1,000. These must be completed by the due date of your tax return. You have until Tax Day to make the catch-up contribution apply to your previous year.

Simplifying Your Social Security Taxes

During your working years, your employer probably withheld payroll taxes from your paycheck. If you make enough in retirement that you need to pay federal income tax, then you’ll also need to withhold taxes from your monthly income.

To withhold taxes from your Social Security benefits, you’ll need to fill out Form W-4V (Voluntary Withholding Request). The form only has seven lines. You will need to enter your personal information and then choose how much to withhold from your benefits. The only withholding options are 7%, 10%, 12% or 22% of your monthly benefit. After you fill out the form, mail it to an SSA office or drop it off in person.

If you prefer to pay more exact withholding payments, you can choose to file estimated tax payments instead of having the SSA withhold taxes. Estimated payments are tax payments that you make each quarter on income that an employer is not required to withhold tax from. So if you ever earned income from self-employment, you may already be familiar with estimated payments.

In general, it’s easier for retirees to have the SSA withhold taxes. Estimated taxes are a bit more complicated and will simply require you to do more work throughout the year. However, you should make the decision based on your personal situation. At any time you can also switch strategies by asking the SSA to stop withholding taxes.

Bottom Line

Is Social Security Income Taxable? (2024 Update) (3)

We all want to pay as little in taxes as possible. This is especially true in retirement when most of us have a set amount of savings. But if you have enough retirement income that you’re paying taxes on Social Security, you’re probably doing well. It means you have income from other sources and you’re not entirely dependent on Social Security to meet living expenses. You can also save on your taxes in retirement simply by having a plan.

Tips for Saving on Taxes in Retirement

  • A financial advisor can help you build a retirement income plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Planning ahead for retirement is incredibly important if you want to ensure your money lasts. SmartAsset’s retirement calculator can help you determine how your plans are looking.
  • Be sure to account for your Medicare costs as you plan out your retirement income too. Check out SmartAsset’s guide to Medicare Part A, Part B, Part C and Part D.

Photo credit: ©iStock.com/Zinkevych, ©iStock.com/DNY59,©iStock.com/DNY59

Is Social Security Income Taxable? (2024 Update) (2024)

FAQs

Is Social Security Income Taxable? (2024 Update)? ›

Are Social Security Benefits (Income) Taxable? If your combined income is above a certain limit (the IRS calls this limit the base amount), you will need to pay at least some tax. The limit for 2023 and 2024 is $25,000 if you are a single filer, head of household or qualifying widow or widower with a dependent child.

Will Social Security benefits be taxed in 2024 for seniors? ›

Starting in 2024, tax Social Security benefits in a manner similar to private pension income. Phase out the lower-income thresholds during 2024-2043.

What is the maximum taxable earnings for Social Security in 2024? ›

2024 Social Security tax limit increase

In 2024, the Social Security tax limit rises to $168,600. (For 2023, the tax limit was $160,200. So, if you earned more than $160,200 this last year, you didn't have to pay the Social Security payroll tax on the amount that exceeds that limit.)

How do I determine how much of my Social Security income is taxable? ›

You report the taxable portion of your social security benefits on line 6b of Form 1040 or Form 1040-SR. Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.

Is the bill to stop taxing Social Security? ›

PAUL – Today, U.S. Representative Angie Craig announced new legislation to eliminate federal taxes on Social Security benefits for seniors. Rep. Craig's You Earned It, You Keep It Act would eliminate all federal taxes on Social Security benefits beginning in 2025 – putting money back into the pockets of retirees.

At what age is Social Security no longer taxed? ›

Social Security tax FAQs

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

What is the extra standard deduction for seniors over 65 in 2024? ›

IRS extra standard deduction for older adults

For 2024, the additional standard deduction is $1,950 if you are single or file as head of household. If you're married, filing, jointly or separately, the extra standard deduction amount is $1,550 per qualifying individual.

How much can I earn in 2024 without affecting my Social Security? ›

In 2024, this limit on your earnings is $59,520.

If your earnings will be more than the limit for the year and you will receive retirement benefits for part of the year, we have a special rule that applies to earnings for 1 year.

What are the tax changes for 2024? ›

For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

Why is Social Security taxed twice? ›

The Introduction of Taxes on Benefits

The rationalization for taxing Social Security benefits was based on how the program was funded. Employees paid in half of the payroll tax from after-tax dollars and employers paid in the other half (but could deduct that as a business expense).

How do I calculate my taxed Social Security earnings? ›

The third page of your Social Security Statement includes your earnings record. This shows you each year you've worked, your taxed Social Security earnings for each year and your taxed Medicare earnings for each year.

Can I get a tax refund if my only income is Social Security? ›

You would not be required to file a tax return. But you might want to file a return, because even though you are not required to pay taxes on your Social Security, you may be able to get a refund of any money withheld from your paycheck for taxes.

Do you pay federal taxes on Social Security? ›

You will pay federal income taxes on your benefits if your combined income (50% of your benefit amount plus any other earned income) exceeds $25,000/year filing individually or $32,000/year filing jointly. You can pay the IRS directly or have taxes withheld from your payment.

How much tax should I withhold from my Social Security check? ›

Withholding on Social Security Benefits

You can elect to have federal income tax withheld from your Social Security benefits if you think you'll end up owing taxes on some portion of them. Federal income tax can be withheld at a rate of 7%, 10%, 12%, or 22% as of the tax year 2022.

How do I stop Social Security from being taxed? ›

How to minimize taxes on your Social Security
  1. Move income-generating assets into an IRA. ...
  2. Reduce business income. ...
  3. Minimize withdrawals from your retirement plans. ...
  4. Donate your required minimum distribution. ...
  5. Make sure you're taking your maximum capital loss.
Nov 21, 2023

What is the maximum income that Social Security is taxed on? ›

The Social Security tax limit refers to the maximum amount of earnings that are subject to Social Security tax. For 2024, the Social Security tax limit is $168,600. Workers earning less than this limit pay a 6.2% tax on their earnings.

Is Social Security taxable in 2025? ›

Currently such taxes are only imposed up to a cap that is indexed to inflation — $168,600 for 2024. The tax cap would continue to rise until it hits $250,000 and is effectively eliminated. Effective in 2025, the proposal would eliminate the federal taxation of Social Security benefits for personal income tax filers.

What is the taxable income for 2024? ›

2024 tax brackets
Tax rateSingle filersMarried couples filing separately
10%$11,600 or less$11,600 or less
12%$11,601 to $47,150$11,601 to $47,150
22%$47,151 to $100,525$47,151 to $100,525
24%$100,526 to $191,950$100,526 to $191,150
3 more rows

Do seniors pay federal income tax on Social Security? ›

You will pay federal income taxes on your benefits if your combined income (50% of your benefit amount plus any other earned income) exceeds $25,000/year filing individually or $32,000/year filing jointly. You can pay the IRS directly or have taxes withheld from your payment.

At what point do you stop paying Social Security taxes? ›

What Is the Social Security Tax Limit? You aren't required to pay the Social Security tax on any income beyond the Social Security wage base limit. In 2024, this limit rises to $168,600, up from the 2023 limit of $160,200. As a result, in 2024 you'll pay no more than $10,453 ($168,600 x 6.2%) in Social Security taxes.

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