Do You Have to Pay Income Tax on Social Security?

Posted by Madison on March 17, 2016

Do you have to pay income tax on social security? How will it impact the taxes on your other income from interest and dividends?

Whether or not your social security benefits are taxable depends on your total income and filing status. In addition, it changes from year to year, so while your social security benefits may have been tax free last year, you could owe tax this year.

My grandma found herself in that very situation one year and was shocked she would owe tax on her social security benefits.

How Social Security Benefits Are Taxed

If Social Security is Your Only Income. There are general rules for the minimum income to file taxes based on gross income. However, gross income doesn’t include social security benefits; as long as Social Security benefits are your ONLY income, your benefits are not taxable.

You’ll get a SSA-1099 form which shows the amount of social security income you received.

Social Security Plus Other Income

If you have other income besides your social security, we’ll have to dig a little deeper:

When Social Security Benefits are Taxable. If you have other income in addition to your social security benefits, you’ll need to use the following formula to determine if your social security is taxable.

You must file a tax return if the following calculation is true:

1/2 (Total Social Security Benefits) + All Other Income > Base Amount

The Social Security base amounts are:

  • $25,000 (single, head of household, qualifying widow with dependent child, married filing separately who did not live with their spouses at any time during the year)
  • $32,000 (married filing joint)
  • $0 (married filing separately, but lived together)

When Social Security Benefits are Not Taxable. And in the reverse situation, you do not need to file a tax return, and your social security benefits are not taxable if the following is true:

Half of your Social Security plus all your gross income from other sources is less than or equal to $25,000 (or $32,000).

What is All Other Income?

In the calculation you have to add all other income to half the social security benefits. What is included in all other income? Almost everything. Be sure to include:

  • Taxable pensions
  • Wages
  • Interest and Dividends
  • Other taxable income
  • Tax-exempt interest
  • Interest from U.S. savings bonds
  • Employer-provided adoption benefits
  • Foreign earned income or foreign housing

Social Security Tax Filing

If you will have to file a tax return, you can see how much tax you will owe on your social security benefits using the Tax Calculator.

The free edition of TurboTax works well for filing simple returns with social security benefits, or you can figure it by hand, like my grandma prefers!

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Comments to Do You Have to Pay Income Tax on Social Security?

  1. OMG social security taxes are difficult to compute!! As a tax preparer, retirement is one of the most complicated times in a tax payers life. I suggest professional help/advice the first two years.


    • I need to know if I can open an IRA before the end of the year to get my salary below the amount allowed so I don’t have to pay federal tax on my social security.I would appreciate any information or where to get info to help me with this problem.
      Thank you


      • It depends which IRA, the money you take out will affect how much taxes you pay in the futures. The money you withdraw from the IRA is added as income. Under the impression you will make less the future, that’s a great idea. What if you make more money? The amount you take out plus your income will determine what tax bracket you will be in. I only know of 2 products designed to be tax free if you take care of it correctly. Your agent won’t tell you that, probably doesn’t even know it existed


  2. I already was taxed when I received my paycheck, why do I have to pay taxes on my social security earnings

    Gary Lienemann

  3. Timely blog post – I loved the info ! Does anyone know if I would be able to locate a template SCAR 255 version to use ?

    ellen dillow

  4. My dad is 82, my mom passed away last year. He receives social security, a modest amount from my mom’s pension plan, plus the minimum distribution from their IRA account. His IRA distribution has not been taxed. If all of his income (including the IRA distribution) is less than $25,000, does he need to file income taxes?


  5. My wife will start work next week at $37,000 a month, she also starts receiving social security $984,00 a month next month which is an amount equal to one half of my SS parment my wife will be 63 this November I am 76 now, my question is how can we avoid her paying $1 for every $2 she earns at this stage in our lifes, Thanke GJT

    George Jack Taber

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