What are the tax implications of Social Security benefits?

What are the tax implications of Social Security benefits?

Social Security benefits may be taxable depending on your total income. If your combined income exceeds certain thresholds, you may have to pay federal income tax on your benefits.

What are the income thresholds for taxing Social Security benefits?

For single filers, if your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxable. Above $34,000, up to 85% may be taxable. For married couples filing jointly, the thresholds are $32,000 and $44,000.

Are there any states that tax Social Security benefits?

Yes, some states do tax Social Security benefits. These include states like Colorado, Connecticut, and Minnesota. It's important to check your state's tax laws.

How can I calculate my combined income for Social Security tax purposes?

Your combined income is calculated by adding your adjusted gross income, nontaxable interest, and half of your Social Security benefits.