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Social Security Mailbox: Determine how much you need withheld on Socia... Skip to content

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Paying Taxes on Social Security

How do I set up tax withholding on my benefits?

En español | Q. I'm new to Social Security and have been told that I may have to pay federal tax on my benefits. Is that true?

A. It's true. About a third of people who collect Social Security have to pay federal income taxes on their benefits. You'll be liable for those taxes if you file as an individual and your adjusted gross income, untaxed interest and half your Social Security benefit add up to more than $25,000. If you file a joint return with your spouse, you’ll owe taxes if that figure is more than $32,000.

At higher income levels, up to 85 percent of Social Security benefits may be taxed.

Q. I've been thinking about putting federal tax withholding on my Social Security benefits. How do I determine what percentage to withhold? The choices are 7 percent, 10 percent, 15 percent or 25 percent.

A. Withholding taxes on your Social Security benefits is voluntary, so there are no rules about how much money " if any " you should ask to have withheld. That's a personal decision that should be made only after consulting with a financial adviser or accountant.

One reason people might choose to have taxes withheld is to avoid having to pay a big lump sum on tax day or to reduce the amount of money they have to send to Uncle Sam each quarter as estimated tax payments.

To figure out whether withholding would be worthwhile for you, you'll want to look at any other income besides Social Security that you receive during the year that might be taxable so you can estimate your tax burden.

Q. What do I have to do to get Social Security to withhold federal taxes on my monthly benefits?

A. You have to file IRS Form W-4V. Select the percentage of your monthly benefit that you want withheld from the available choices: 7 percent, 10 percent, 15 percent or 25 percent. Then sign the form and return it to your local Social Security office by mail or in person.

You can obtain the form from the IRS website, by calling the IRS at 1-800-829-3676, or by calling Social Security at 1-800-772-1213.

People who are deaf or hard of hearing may call Social Security's TTY number, 1-800-325-0778.

Stan Hinden is a former columnist for the Washington Post specializing in retirement issues. He is the author of 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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