With the April 15 deadline to file taxes right around the corner, it might be a good opportunity to address an issue and question that comes up all the time for people who are receiving or have been notified that they have been approved to receive either Social Security retirement or Social Security disability benefits. “Do I have to pay taxes on my Social Security benefits?”
As is the case with a lot of questions related to the Social Security Administration, the answer can be a bit ambiguous because the answer is yes for some people and no for most.
The people who have to pay taxes on their Social Security benefits usually have other forms of substantial income in the form of wages, self-employment income, interest, dividends or other taxable income that must be reported on your tax return.
If your Social Security benefits amount to less than $25,000 per year you will not have to pay taxes on them, but the following rules apply to other situations.
- If you file a federal tax return as an individual and your combined income is between $25,000 and $34,000 you may have to pay income tax on up to 50 percent of your benefits. If your combined income is more than $34,000, up to 85 percent of your benefits may be taxable.
- If you file a joint return with a spouse and you have combined income between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits. If you have combined income of more than $44,000, up to 85 percent of your benefits may be taxable.
To learn more about how either your Social Security retirement or disability benefits may be taxable click here.
