Taxes on Social Security Benefits
Are you wondering about taxes on social security benefits? If your social security check was your only source of income, your benefits may not be taxable. You might not have to file an income tax return.
Taxes on your social security benefits are based on what your modified adjusted gross income (MAGI) is for the year and your filing status is also part of the formula for figuring out your taxable income.
Calculating Income for Taxation on Social Security Benefits
If you have additional income to report along with your Social Security benefits, you will have to take the total and use that amount to calculate your tax. You may or may not have any tax owed.
Here’s how the taxes work on Social Security benefits. If your income is lower than the base amount allowed, you will not be taxed. If your income is between the base amount and the additional amount, then half of your Social Security benefits over the base amount are taxable. If your income is over the additional amount, then $4,500 (or $6,000 if Married Filing Jointly) plus 85% of your Social Security benefits over the additional amount are taxable.
Social Security Benefits Base and Additional Amounts
Here’s an example of filing status, base amounts, and additional amounts of total income. If you’re single, the base amount is $25,000 and the additional amount is $34,000. The numbers are the same for the Head of Household filing status. If you’re Married Filing Jointly, the base amount is $32,000 and the additional amount is $44,000.
The way to calculate your taxes on Social Security Benefits is to use the “Social Security Benefits Worksheet” which is located in the instructions for tax form 1040. You can also consult the PDF from the IRS called Tax Topics 423.
Tax Software can Help Calculate Tax on Social Security Benefits
If you would like help with calculating your taxes for Social Security benefits, you should try online tax preparation software, such as TurboTax Online. You can try before you buy to see if you even need to file a tax return. You don’t pay unless you choose to file or print your completed tax form. Let the tax experts do the calculations for you to ensure accuracy and to provide the biggest refund guaranteed!