Do You Have to Pay Taxes on Social Security Benefits? (2024)

FAQs

Do You Have to Pay Taxes on Social Security Benefits? ›

You will pay federal income taxes on your benefits if your combined income (50% of your benefit amount plus any other earned income) exceeds $25,000/year filing individually or $32,000/year filing jointly. You can pay the IRS directly or have taxes withheld from your payment.

Income Taxes and Your Social Security Benefit (En español)

Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. More than $34,000, up to 85% of your benefits may be taxable.

There is no age at which you will no longer be taxed on Social Security payments.

Unless your combined income for 2024 is less than $25,000 (less than $32,000 for married couples filing jointly), a percentage of your Social Security payments will be subject to income tax.

Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.

Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.

Unearned Income is all income that is not earned such as Social Security benefits, pensions, State disability payments, unemployment benefits, interest income, dividends, and cash from friends and relatives. In-Kind Income is food, shelter, or both that you get for free or for less than its fair market value.

The revenue generated by taxing benefits is used to shore up the Social Security and Medicare trust funds, which are currently dwindling. The Social Security trust fund, if combined with the program's Disability Insurance Trust Fund, could pay out the full retirement benefit until 2035.

Single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.

If Social Security is your sole source of income, then you don't need to file a tax return. However, if you have other income, you may be required to file a tax return depending on the amount of other income.

What is the Social Security 5 year rule? ›

If you become disabled before your full retirement age, you might qualify for Social Security disability benefits. You must have worked and paid Social Security taxes in five of the last 10 years.

If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase. If you start receiving benefits early, your benefits are reduced a small percent for each month before your full retirement age.

You can earn a maximum of $59,520 before your benefit is reduced in 2024. Only your earnings up to the month you reach full retirement age are counted. Your benefit will be reduced by $1 for every $3 you earn beyond that limit up to the month you reach full retirement age.

Calculating your social security tax rate

No more than 85% of Social Security benefits are ever taxable, regardless of the amount of your earned income.

To get a refund for the excess withholding, fill out IRS Form 843: Claim for Refund and Request for Abatement according to the Form 843 Instructions and mail it in separately. Make a copy to keep with your tax return paperwork.

At What Age Can You Stop Filing Taxes? Taxes aren't determined by age, so you will never age out of paying taxes.

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $168,600 (in 2024), while the self-employed pay 12.4 percent. The payroll tax rates are set by law, and for OASI and DI, apply to earnings up to a certain amount.

Single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.

Visit our website to set up or sign in to your personal my Social Security account. Under the “My Home” tab, click on “Earnings Record” to view your online Social Security Statement and taxed Social Security earnings.

Federal withholding tax from Social Security

You can choose a withholding rate of 7%, 10%, 12%, or 22%. You can change or stop withholding by completing and submitting a new W-4V.