Exactly how much tax do I pay on social security benefits?

[Kerguelen]

I'm trying to figure out how much tax I will pay on social security benefits for 2024.

I will get approximately $28,000 from Social Security this year. And from the info I am gathering, you don't pay any tax at all if the amount is less than $25,000.

So in my case, where it is over $25,000, is the entire amount of $28,000 considered taxable? Or just the amount above $25,000?

   1. Will I be paying tax on the entire $28,000? 

   2. Or am I paying tax on only the portion above $25,000 (which would be tax on only $3,000)?

This is so confusing to me.

[VolvoGirl]

It's complicated.   Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

To see the Social Security Benefits Calculation Worksheet in Turbo Tax Online version you would have to save your return with all the worksheets to your computer. Or if you are using the Desktop CD/Download Software you can switch to Forms Mode (click Forms in the upper right) and click on SS in the list on the right side.

If you only get a SSA-1099 it is not taxable and you don't have to report it or file a tax return.

[Kerguelen]

Even more confused now. But thanks for the answer. 

[Kerguelen]

So let's do a hypthetical... 

Let's say I fall into the > 25K theshold, i.e. if I were to get $50,000 in Social Security (which I am not, it's just an example).

So half of SS income (50K - 25K) is 25K and that hit's the threshold. What confuses me is the amount I would pay tax on? Is the entire $50K taxable because it exceeds the limit? Or is JUST the amount that goes over the limit taxable. In this case will I be paying tax on 50K or 25K ???  

In other words, if you go over the 25K threshold, is the first 25K being taxed, or JUST the amount over 25K.

[VolvoGirl]

No.  It depends on how much OTHER income you have.  Like W2 wages, interest & dividends, 1099R retirement and IRA withdrawals, self employment income, etc.  If you Only get Social Security it is not taxable and you don't have to file a tax return.  

[VolvoGirl]

You can try filling out the IRS worksheet by hand an see what you come up with. But it can be tricky and most people do it wrong.

IRS Pub. 915 on Social Security. There is a blank worksheet on page 16.
https://www.irs.gov/pub/irs-pdf/p915.pdf

[Kerguelen]

BUT if it is taxable because I have some extra income that I report? What is taxable?

That is my question.

Let's assume my earned income + SS benefits is well over 25K.

Do I pay any tax at all on that first 25K or just the amount that goes over 25K.

If it's like the IRS tax tables for income tax returns, I guess you are paying taxes on the entire amount? 

Oh ... and add in the personal deduction and I have no idea what I need to pay.

I really don't want a surprise at tax time, or a penalty for not withholding.

[Kerguelen]

I'll try that form. Thanks.