Millions of older Americans live solely on a Social Security check. And while other Americans rely mostly on workplace retirement plans like a401(k) or an individual retirement account (IRA), these monthly benefits from the government can make or break your retirement.Let’s take a look at how your Social Security is taxed after age 70.
For more help figuring out how Social Security will fit into your personal retirement planning journey, consider working with a financial advisor.
Social Security, Defined
Social Security is a government program created in 1935 as a part of President Franklin Delano Roosevelt’s New Deal, a series of programs designed to fight the Great Depression. Social Security is considered by most people to be the cornerstone of America’s social safety net. Social Security sends monthly checks to Americans who have reached retirement age, currently set at 67.
The amount of money you get each month depends on how much money you earned during your career and how old you were when you retired. The program is funded by Social Security taxes taken out of each American worker’s paychecks. The average monthly check as of July 2023 is for $1,790.56, and the maximum check for a person retiring in 2023 at age 70 is $4,555.
Social Security and Federal Taxes
Even though Social Security money comes directly from the federal government, some of it will be going back to Uncle Sam in the form of federal income taxes. Social Security is treated as regular income for the purpose of taxes. There is a formula to determine how much of your Social Security check will be taxed, but essentially half of it as counted as combined income, along with other forms of retirement income. Depending on your total combined income, up to 85% of that half will be taxed.
Is Social Security Taxable After Age 70?
Though there are some rumors on the internet that the government stops taxing Social Security payments once you reach a certain age, such as 70, this is simply not true. Social Security payments are taxable from the moment you start receiving them until you die.
Social Security and State Taxes
Some of the confusion over the tax status of Social Security payments likely comes from the fact that each state treats Social Security differently.Many states treat Social Security the same way the federal government does, taxing every dollar of it based on the bracket you slot into with your full retirement income. This means that your Social Security check will be taxed twice – once by the federal government and once by your state.
Other states only partially tax Social Security. They might only tax 50% of it, or have some other formula for determining exactly how much of your monthly check is subject to state taxes.
Finally, some states don’t tax Social Security at all. For some of these states it is a special carveout, and for others it is simply because there is no state income tax, so none of your retirement income will be subject to any state tax.
Bottom Line
Yes, Social Security is taxed federally after the age of 70. If you get a Social Security check, it will always be part of your taxable income, regardless of your age. There is some variation at the state level, though, so make sure to check the laws for the state where you live.
Retirement Tax Tips
- A financial advisor can help you keep inline with all retirement tax rules. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Determine your total tax burden by using SmartAsset’s free income tax calculator.
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FAQs
Social Security can potentially be subject to tax regardless of your age. While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
Will Social Security be taxed in 2024 for seniors? ›
Starting in 2024, tax Social Security benefits in a manner similar to private pension income.
How do I figure how much of my Social Security is taxable? ›
You report the taxable portion of your social security benefits on line 6b of Form 1040 or Form 1040-SR. Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.
How much can a 70 year old earn without paying taxes? ›
For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older. Married retirees filing separately who earn less than ...
How much of Social Security is taxable for seniors? ›
Single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits. Do you need help figuring out your required minimum distributions?
At what point does Social Security become taxable? ›
Generally, your Social Security benefits are taxed when your income is more than $25,000 per year, including income from investments held in retirement accounts like traditional 401(k)s and IRAs. If Social Security is your only source of income, you likely won't pay any tax on those payments.
Is Congress going to stop taxing Social Security? ›
PAUL – Today, U.S. Representative Angie Craig announced new legislation to eliminate federal taxes on Social Security benefits for seniors. Rep. Craig's You Earned It, You Keep It Act would eliminate all federal taxes on Social Security benefits beginning in 2025 – putting money back into the pockets of retirees.
How much of my Social Security income is taxable in 2024? ›
Up to 50% of your Social Security benefits are taxable if: You file a federal tax return as an "individual" and your combined income is between $25,000 and $34,000. You file a joint return, and you and your spouse have a combined income between $32,000 and $44,000.
Why is Social Security taxed twice? ›
The Introduction of Taxes on Benefits
The rationalization for taxing Social Security benefits was based on how the program was funded. Employees paid in half of the payroll tax from after-tax dollars and employers paid in the other half (but could deduct that as a business expense).
How do I get the $16728 Social Security bonus? ›
There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Taxpayers who are age 65 or older can claim an additional standard deduction, which is added to the regular standard deduction. For the 2024 tax year (for forms you file in 2025), the extra amount ranges from $1,550 to $3,900, depending on your tax filing status and whether you are blind.
How much money does a senior have to make to file taxes? ›
How do I know if I have to file a federal tax return?
| Filing status | Age | Minimum income |
|---|
| Single | Over 65 | $14,700 |
| Head of household | Under 65 | $19,400 |
| Head of household | Over 65 | $21,150 |
| Married filing jointly | Under 65 (both spouses) | $25,900 |
6 more rowsNov 6, 2023
Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.
At what age can you earn unlimited income without affecting Social Security? ›
later, then your full retirement age for retirement insurance benefits is 67. If you work, and are at full retirement age or older, you may keep all of your benefits, no matter how much you earn.
At what age is income no longer taxable? ›
Taxes aren't determined by age, so you will never age out of paying taxes. Basically, if you're 65 or older, you have to file a tax return in 2022 if your gross income is $14,700 or higher. If you're married filing jointly and both 65 or older, that amount is $28,700.
Can I get a tax refund if my only income is Social Security? ›
You would not be required to file a tax return. But you might want to file a return, because even though you are not required to pay taxes on your Social Security, you may be able to get a refund of any money withheld from your paycheck for taxes.
How do you get the $16728 Social Security bonus? ›
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
