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Social Security Benefits and Taxes

Will the IRS take a chunk of my payment?

En español | Q. If I sign up for Social Security now while my husband is earning a relatively high income, will the IRS tax a large percentage of my Social Security income?

See also: Collecting benefits while working.

A. It will depend on the amount of your family income. About one-third of people who get Social Security have to pay income taxes on their benefits. You may have to pay federal taxes on some of your benefits if you file a tax return as an individual and your "combined income" is more than $25,000. (Social Security defines combined income as adjusted gross income, plus non-taxable interest and half your Social Security benefit.) If you file a joint return with your spouse, you will have to pay taxes on some of the benefits if that figure is more than $32,000.

As your family income goes up, so may the taxes on your Social Security benefits. At higher income levels, up to 85 percent of your Social Security benefits may be taxed.

Before you sign up for Social Security, you may wish to consult an accountant or other financial adviser to learn your options. You should also check to find out whether your state and local authorities tax benefits — many do not.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question? Check out the AARP Social Security Question and Answer Tool.

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