Retire Safe & Tax Free - Marc My Words... Social Security & Taxation


The Social Security Administration estimates that 96% of American workers are covered by Social Security. For most of them, their monthly Social Security check will form an important part of their retirement income.

Some people who receive Social Security retirement benefits have to pay federal income tax on a portion of their benefits. If your total income plus half of your Social Security retirement benefits exceeds a base amount, some of your Social Security retirement benefits are taxable.

Total Income:

In determining your total income, you must include any tax-exempt interest income, excludable interest from U.S. savings bonds and excludable income earned in a foreign country, U.S. possession or Puerto Rico. If you are married and file a joint return, you and your spouse must combine your incomes and Social Security retirement benefits to figure whether any of your combined benefits are taxable. Even if your spouse did not receive any Social Security retirement benefits, if you file a joint return, you must add your spouse's income to yours in determining whether any of your benefits are taxable.

Taxable Benefits?:

To determine whether any of your Social Security retirement benefits may be taxable, add one-half of your Social Security retirement benefits to your total income. The higher this combined income, the more benefits you must include in taxable income.

If your total income plus one-half of your Social Security retirement benefits is more than the following base amount for your filing status, up to 50% of your benefits are included in your gross income for federal income tax purposes:

  • $32,000 if you are married filing a joint return.
  • $-0- if you are married filing separate returns and lived with your spouse at any time during the year.
  • $25,000 for all other taxpayers.

If your total income plus one-half of your Social Security retirement benefits is more than the following adjusted base amount for your filing status, up to 85% of your benefits are included in your gross income for federal income tax purposes:

  • $44,000 if you are married filing a joint return.
  • $-0- if you are married filing separate returns and lived with your spouse at any time during the year.
  • $34,000 for all other taxpayers.

At the end of each year, the Social Security Administration mails a Social Security Benefit Statement that shows the amount of benefits you received. This statement can be used when completing your federal income tax return to find out if you have to pay taxes on any of your Social Security retirement benefits.

Marc H. Weiss, Archer Weiss Insurance & Financial Services, Inc. Please Call Toll free: 1-800-831-2901 or (818) 610-8560