Here's how to calculate how much of your Social Security benefits may be taxable:
1. Find Your "Combined Income": This is not your standard Adjusted Gross Income (AGI). To calculate it, you add:
- First take your AGI from sources other than Social Security.
- Then any tax-exempt interest (like from municipal bonds).
- and then add half of your total Social Security benefits for the year.
2. Use Your Filing Status and Combined Income to Determine Taxability: The portion of your benefits that is taxable depends on your filing status and combined income.
- Individual Filers: (Single, Head of Household, Qualifying Widow(er)):
- Combined income under $25,000: None of your benefits are taxable.
- Combined income between $25,000 and $34,000: Up to 50% of your benefits may be taxable.
- Combined income over $34,000: Up to 85% of your benefits may be taxable.
- Married Filing Jointly:
- Combined income under $32,000: None of your benefits are taxable.
- Combined income between $32,000 and $44,000: Up to 50% of your benefits may be taxable.
- Combined income over $44,000: Up to 85% of your benefits may be taxable.
- Married Filing Separately:
- You'll likely have to pay taxes on your benefits at a higher rate if you lived with your spouse at any point during the year.
To help you calculate the taxable portion of your Social Security benefits, use TurboTax and IRS tools. You can use: the IRS Tax Withholding Estimator, or Free Tax and Money Saving Tools TurboTax. The exact calculation can be complex. You can use TurboTax software to calculate or the IRS has worksheets that can be used to help you figure out the exact taxable amount found in Publication 915.
For more information see:
Please feel free to reach backout with any additional questions or concerns you might have!
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Terri Lynn
