Hi, in addition to the great responses below, I thought I would add some calculations/other info that may be helpful. All of this assumes you have no other source of income than Social Security and interest and all the interest is taxable.
First, know that your ultimate taxable income is generally less than what you might think of as "income,"" as it is reduced by a deduction (either standard or itemized). Assuming you are married, filing jointly and both over 65, you would have a standard deduction in 2022 of $28,700 ($27,300 if only one of you is over 65--Note if either of you are blind, the standard deduction would be greater). It's also possible that you have itemized deductions which are higher than the standard deduction.
In the first place, if your interest plus 1/2 your combined social security is less than $32,000 (YOUR COMBINED INCOME), you will not have to pay federal income tax (ignoring that standard or itemized deduction).
However, if your interest plus 1/2 your combined social security is greater than $32,000 (YOUR COMBINED INCOME), you may have to pay federal income tax. Here's an example that may help you make sense of this.
Scenario:
Taxable interest $35,000
Total SS is $66000 (1/2 = $33K) 33,000
Combined income $68,000
$68K is greater than the $44K threshold where SS becomes taxable at 85%
Therefore:
Taxable interest $35,000
Plus 85% of $66K SS 56,100
Total agi 91,100
Less standard deduction (use itemized if greater) $28,700
Taxable income $62,400
You can see that there are a lot of variables that impact your question. For this reason, I suggest you experiment with the Tax Calculator, which will let you play our your particular scenarios in more detail.
Please use the thumbs up to cheer below if this helps.
Regards,
Karen
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