If your only taxable income is social security and 1/2 of this amount is above the $25,000 threshold where 50% of your social security being taxed. Do you still benefit from the standard deduction coming off of the 1/2 of the social security that you are taxed on?
No. Only 50% of the amount that is over $25,000 will be included in your taxable income assuming you have no other taxable income. The answer assumes that half of your social security is not greater than $34,000.
Check your state rules to see if they tax social security income.
@Longswamp yes, you do.
Let's use an example: say $60,000 of SS income and that is the ONLY income you have. (frankly there is no reporting requirement, but let's go through the exercise).
1/2 of that is $30,000 less $25,000 or $5,000. Then half of that or $2500 is taxable income, but that is less than the standard deduction of $16,550 (over 65 years old)
So if your Total AGI (including 1/2 of Social Security) is over the $25,000 threshold for being taxed at 50%, the $25,000 is deducted before determining the taxable amount?
Is this $25,000 included when determining the tax bracket that you fall into?
You said your only taxable income is Social Security? What other income do you have? If you only get Social Security it is not taxable and you do not have to file a tax return.
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 left side.
Before filing, You can preview the 1040 or print the whole return