How to calculate how much of social security is taxable

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Social Security Tax Calculator
How Much Do You Get for Social Security Retirement?
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Tax Withholding and Estimated Tax Payments for Social Security Benefits

Did you know that up to 85% of your Social Security benefits may be subject to income tax? If this is your situation, you may want to consider repositioning some of your other income to minimize how much of your Social Security benefit may be taxed and thereby, maximize your retirement income sources. Use our Social Security tax calculator to better calculate your Social Security benefits.

How much you get for Social Security retirement benefits will depend on a number of factors, including your income, how long you worked and when you retired. One thing you’ll need to consider when getting your retirement benefits or when planning for Social Security retirement is that it may be taxed.

If you have a combined income but are filing as an individual, your benefits aren’t taxed if your benefits are below $25,000. If your income is above that but is below $34,000, up to half of your benefits may be taxable. For incomes of over $34,000, up to 85% of your retirement benefits may be taxed.

For the purposes of taxation, your combined income is defined as the total of your adjusted gross income plus half of your Social Security benefits plus nontaxable interest. Other wages that may be applied to this include self-employment income, wages, capital gains and dividends or other investment income from interest, annuities, pensions, rental property profits, municipal bond interest and withdrawals from retirement accounts such as IRAs, 403(b) and 401(k) accounts. Roth IRA withdrawals don’t count toward combined income.

You can use the Money Help Center calculator to determine how much Social Security you will get and how income tax may impact your benefits and income. You need to plan for retirement by considering how you will be taxed once your working life ends. You don’t want to get an unpleasant surprise when you start earning your retirement income or getting your benefits and realize it is less than you expected because of tax withdrawals.

At the same time, Social Security can be a smart part of your retirement plan. Even if you are taxed at the highest level, you may still benefit. After all, from virtually any other source of income, 100% of your wages and income will be taxed after retirement. Dollar for dollar, Social Security retirement benefits can still be a better deal as far as taxation, than other sources of retirement.

As you plan for your golden years, it is important to keep in mind all the sources of income you may have once you finish working. Plan ahead and consider the tax impact on your income as well as any tax advantages you can secure today while saving for retirement. Use the Money Help Center calculators to help you plan. Our calculators are free, have no bias and never ask you for your personal information, such as contact information or e-mail address. You can use them at any time and instantly get information to help you plan for your financial future.

Many people are surprised to learn that Social Security benefits can be taxed. After all, why is the government sending you a payment one day and asking for some of it back the next? But if you take a closer look at how the federal tax on Social Security is calculated, you'll see that many people actually don't pay any tax on their Social Security benefits.

There's no federal income tax on Social Security benefits for most people who only have income from Social Security. Thanks to the highest cost-of-living adjustment in 40 years, the average monthly Social Security check for a retired worker in 2022 is $1,658, which comes to $19,896 per year. That's well below the minimum amount for taxability at the federal level.

On the other hand, if you do have other taxable income — such as from a job, a pension or a traditional IRA — then there's a much better chance that Uncle Sam will take a 50% or 85% bite out of your Social Security check. Plus, depending on where you live, your state might tax a portion of your Social Security benefits, too.

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(Note that Supplemental Security Income (SSI) payments sent by the Social Security Administration are not taxable.)

Once you start collecting Social Security benefits, you'll get a Social Security benefits statement (Form SSA-1099) in the mail each year in January showing the total amount of benefits you received in the previous year. To figure out how much, if any, of the total amount may be taxed, the first thing you need to do is calculate your "provisional income." Your provisional income is generally equal to the combined total of (1) 50% of your Social Security benefits, (2) your tax-exempt interest, and (3) the other non-Social Security items that make up your adjusted gross income (minus certain deductions and exclusions).

For single people, your Social Security benefits aren't taxed if your provisional income is less than $25,000. The threshold is $32,000 if you're married and filing a joint return. If your provisional income is between $25,000 and $34,000 for a single filer, or from $32,000 to $44,000 for a joint filer, then up to 50% of your Social Security benefits may be taxable. If your provisional income is more than $34,000 on a single return, or $44,000 on a joint return, up to 85% of your benefits may be taxable.

The IRS has a handy calculator (opens in new tab) that can help you determine whether any of your Social Security benefits are taxable and, if so, how much. Once you know how much (if any) is taxable, that amount is included on Line 6b of Form 1040 and becomes part of your taxable income. That income is then taxed with other income according to your tax bracket.

When calculating taxes on Social Security benefits, include the taxable part of a lump-sum (retroactive) payment of benefits received during the year in your income for the year, even if the payment includes benefits for an earlier year. But, if it lowers your taxable benefits, a special rule may allow you to calculate the taxable part of a lump-sum payment using your income for the earlier year.

Don't confuse lump-sum retirement benefits with lump-sum death benefits, though. No part of a lump-sum death benefit paid by the Social Security Administration is taxable.

If you know in advance that a portion of your Social Security benefits will be taxed, it's a good idea to have federal income taxes withheld from your payment each month. Simply fill out Form W-4V (opens in new tab) to request withholding at a rate of 7%, 10%, 12% or 22%, and then send the form to your local Social Security office.

If you don't want to have taxes withheld from your monthly payments, you can make quarterly estimated tax payments instead. Either way, you just want to make sure you have enough withheld or paid quarterly to avoid an IRS underpayment penalty when you file your income tax return for the year.

In addition to federal taxes, some states tax Social Security benefits, too. The methods and extent to which states tax benefits vary. For example, New Mexico treats Social Security benefits the same way as the federal government. On the other hand, some states tax Social Security benefits only if income exceeds a specified threshold amount. Missouri, for instance, taxes Social Security benefits only if your income is at least $85,000, or $100,000 if you're married filing a joint return. Utah includes Social Security benefits in taxable income but allows a tax credit for a portion of the benefits subject to tax.

Although you can't have state taxes withheld from your Social Security benefits, you generally can make estimated state tax payments. Check with the state tax agency (opens in new tab) where you live for information about the your state's estimated tax payment rules.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.