How much of your Social Security income is taxable?
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?
When determining how much you may be taxed, the first step is to calculate your "combined income." The IRS says your combined income is your adjusted gross income (AGI) plus nontaxable interest and half of your Social Security benefits from the year. You then take away certain deductions and exclusions.
Regardless of your total income, the maximum taxable portion of your Social Security benefits won't exceed 85% under the current tax codes.
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.
Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $168,600 (in 2024), while the self-employed pay 12.4 percent. The payroll tax rates are set by law, and for OASI and DI, apply to earnings up to a certain amount.
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.
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 return for tax year 2023 (which is due in 2024) if your gross income is $15,700 or higher. If you're married filing jointly and both 65 or older, that amount is $30,700.
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.
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.
If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2024, that limit is $22,320. In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit.
How do you get the $16728 Social Security bonus?
The flagship welfare programme in the US has rigid and specific rules for how much one's monthly check will be; there are no extra bonuses to receive. There is no such thing as an “annual bonus” of $16,728″ for Social Security.
However, the double-taxation of Social Security benefits can occur at the state level. A grand total of 38 states don't tax Social Security benefits. But if you live in one of the 12 states that do tax Social Security benefits, and earn above the preset income thresholds in those states, double taxation can occur.
About 40% of people who get Social Security must pay federal income taxes on their benefits. This usually happens if you have other substantial income in addition to your benefits.
If you are 65 or older and blind, the extra standard deduction is: $3,700 if you are single or filing as head of household. $3,000 per qualifying individual if you are married, filing jointly or separately.
Unearned Income is all income that is not earned such as Social Security benefits, pensions, State disability payments, unemployment benefits, interest income, dividends, and cash from friends and relatives. In-Kind Income is food, shelter, or both that you get for free or for less than its fair market value.
The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822. However, if you retire at age 62 in 2024, your maximum benefit would be $2,710. If you retire at age 70 in 2024, your maximum benefit would be $4,873.
Social Security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income payments, which aren't taxable. The portion of benefits that are taxable depends on the taxpayer's income and filing status.
How much can you earn and still get benefits? 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.
THE INCOME TAX IMPLICATIONS
Regardless of your income level, no more than 85% of your Social Security benefits will ever be subject to federal taxation. Note that California does not currently tax Social Security benefits, although 13 other states do.
If you will reach full retirement age in 2024, the limit on your earnings for the months before full retirement age is $59,520. Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
Do you have to pay Social Security tax after age 66?
Everyone working in covered employment or self-employment regardless of age or eligibility for benefits must pay Social Security taxes. However, there are narrow exceptions to paying Social Security taxes that apply at any age, such as an individual who qualifies for a religious exemption.
Employers. Employers are required by law to withhold employment taxes from their employees. Employment taxes include federal income tax withholding and Social Security and Medicare Taxes.
| Filing status | Age | Minimum income |
|---|---|---|
| Single | Under 65 | $12,950 |
| Single | Over 65 | $14,700 |
| Head of household | Under 65 | $19,400 |
| Head of household | Over 65 | $21,150 |
The minimum income amount depends on your filing status and age. In 2023, for example, the minimum for Single filing status if under age 65 is $13,850. If your income is below that threshold, you generally do not need to file a federal tax return.
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.
References
- https://finance.yahoo.com/news/social-security-taxed-age-70-134206548.html
- https://www.ssa.gov/policy/docs/issuepapers/ip2015-02.html
- https://n26.com/en-eu/blog/annual-salary
- https://www.usatoday.com/story/money/taxes/2024/01/04/extra-standard-deductions-seniors-2024/72088966007/
- https://www.ssa.gov/OP_Home/cfr20/416/416-1123.htm
- https://www.empower.com/the-currency/money/can-withdraw-401k-ira-penalty-free
- https://faq.ssa.gov/en-us/Topic/article/KA-01921
- https://www.investopedia.com/articles/retirement/12/will-you-pay-taxes-during-retirement.asp
- https://www.cnet.com/personal-finance/social-security-recipients-reasons-to-file-your-taxes-in-2024/
- https://www.investopedia.com/financial-edge/0411/5-groups-that-dont-pay-taxes.aspx
- https://www.irs.gov/payments/tax-withholding
- https://www.ssa.gov/potentialentitlement/
- https://www.kiplinger.com/taxes/social-security-tax-wage-base-jumps
- https://finance.yahoo.com/news/social-security-16-728-yearly-155211996.html
- https://www.ssa.gov/pubs/EN-05-10007.pdf
- https://www.ssa.gov/sf/FactSheets/aianssavsssifinalrev.pdf
- https://apps.irs.gov/app/IPAR/resources/help/unearn.html
- https://www.govexec.com/pay-benefits/2024/01/what-you-need-know-about-social-security-earnings-test/393399/
- https://www.ssa.gov/benefits/retirement/planner/annuities.html
- https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable
- https://www.aarp.org/retirement/social-security/questions-answers/when-does-earnings-limit-expire.html
- https://www.ssa.gov/oact/solvency/provisions/taxbenefit.html
- https://www.ssa.gov/oact/cola/Benefits.html
- https://www.1040.com/blog/2017/1/12/do-cash-gifts-count-as-income/
- https://www.cuddiganlaw.com/blog/how-money-in-the-bank-or-other-assets-may-affect-your-eligibility-for-social-security-disability.cfm
- https://www.cnbc.com/2024/03/02/millionaires-reach-limit-for-social-security-payroll-taxes-for-2024.html
- https://www.jacksonhewitt.com/tax-help/tax-tips-topics/filing-your-taxes/earned-income-vs-unearned-income/
- https://www.investopedia.com/articles/personal-finance/103015/can-your-401k-impact-your-social-security-benefits.asp
- https://www.ssa.gov/pubs/EN-05-10022.pdf
- https://smartasset.com/taxes/is-social-security-included-in-agi
- https://edd.ca.gov/en/payroll_taxes/what_are_wages/
- https://www.ssa.gov/benefits/retirement/planner/whileworking.html
- https://www.usatoday.com/money/blueprint/retirement/earn-and-collect-social-security/
- https://www.elderlifefinancial.com/resources/do-seniors-have-to-file-taxes/
- https://www.usatoday.com/story/money/taxes/2024/01/01/is-social-security-taxable/71803090007/
- https://www.irs.gov/pub/irs-news/at-01-08.pdf
- https://www.ssa.gov/benefits/retirement/matrix.html
- https://www.ssa.gov/benefits/retirement/planner/taxes.html
- https://finance.yahoo.com/news/millionaires-billionaires-collect-social-security-120017983.html
- https://www.investopedia.com/terms/t/taxableincome.asp
- https://www.ssa.gov/retirement/eligibility
- https://www.investopedia.com/ask/answers/020215/can-i-collect-social-security-if-i-still-have-job.asp
- https://turbotax.intuit.com/tax-tips/irs-tax-return/does-everyone-need-to-file-an-income-tax-return/L7pluHkoW
- https://www.ssa.gov/ssi/text-income-ussi.htm
- https://smartasset.com/retirement/do-seniors-ever-stop-filing-taxes
- https://myucretirement.com/Resource/240
- https://www.nasdaq.com/articles/are-social-security-benefits-double-taxed-the-answer-isnt-as-simple-as-you-think
- https://finance.yahoo.com/news/housing-market-2023-happens-sell-183403809.html
- https://www.ssa.gov/benefits/retirement/planner/1956.html
- https://www.ssa.gov/ssi/text-over-ussi.htm
- https://www.disabilityexpertsfl.com/blog/can-you-collect-social-security-at-66-and-still-work-full-time
- https://web.helpadvisor.com/retirement/full-retirement-age-born-in-1958
- https://www.ssa.gov/benefits/retirement/planner/agereduction.html
- https://www.bamboohr.com/resources/hr-glossary/social-security-wages
- https://www.ssa.gov/news/press/factsheets/HowAreSocialSecurity.htm
- https://www.kotaklife.com/insurance-guide/savingstax/the-difference-between-gross-income-total-income-in-calculating-income-tax
- https://turbotax.intuit.com/tax-tips/general/video-what-is-social-security-tax/L1yUfuIw1
- https://www.ssa.gov/pubs/EN-05-10024.pdf
- https://apps.irs.gov/app/IPAR/resources/help/eihave.html
- https://finance.yahoo.com/news/pension-vs-social-security-more-210000199.html
- https://en.as.com/latest_news/social-security-is-it-possible-to-qualify-for-an-annual-bonus-of-16728-n/
- https://www.nerdwallet.com/article/investing/social-security/social-security-taxed
- https://www.ssa.gov/benefits/survivors/
- https://www.ssa.gov/OP_Home/cfr20/416/416-1110.htm
- https://www.ssa.gov/pubs/EN-05-10035.pdf
- https://taxsummaries.pwc.com/united-states/individual/other-taxes
- https://faq.ssa.gov/en-us/Topic/article/KA-02525
- https://www.hrblock.com/tax-center/income/other-income/how-much-do-you-have-to-make-to-file-taxes/
- https://www.marca.com/en/lifestyle/us-news/2023/07/03/64a2ec80ca4741196f8b45c5.html
- https://faq.ssa.gov/en-us/Topic/article/KA-02471
- https://smartasset.com/personal-finance/earned-vs-unearned-income
- https://faq.ssa.gov/en-us/Topic/article/KA-01897
- https://smartasset.com/retirement/is-social-security-taxed-after-age-70
- https://www.irs.gov/government-entities/indian-tribal-governments/itg-faq-2-answer-what-income-is-considered-earned-income
- https://www.kiplinger.com/retirement/social-security/604321/taxes-on-social-security-benefits
- https://www.iowalegalaid.org/resource/my-only-income-is-social-security-do-i-have-to-pay-any-taxes-on-my-benefits
- https://finance.yahoo.com/news/im-senior-ever-stop-filing-130049838.html
- https://turbotax.intuit.com/tax-tips/retirement/when-does-a-senior-citizen-on-social-security-stop-filing-taxes/L53Hx1v9W
- https://www.ssa.gov/pubs/EN-05-10069.pdf
- https://www.forbes.com/advisor/retirement/social-security-5-year-rule/
- https://www.compt.io/total-compensation-hr-guide
- https://www.irs.gov/faqs/social-security-income
- https://web.helpadvisor.com/retirement/full-retirement-age-born-in-1957
- https://www.ssa.gov/manage-benefits/request-withhold-taxes
- https://www.irs.gov/e-file-providers/definition-of-adjusted-gross-income
- https://www.nerdwallet.com/article/investing/social-security/spousal-benefits-loophole
- https://www.schwab.com/learn/story/social-security-is-taxable-how-to-minimize-taxes
- https://www.ssa.gov/history/taxationofbenefits.html
- https://www.bankrate.com/retirement/average-monthly-social-security-check/
- https://smartasset.com/retirement/social-security-tax-limit
- https://www.investopedia.com/ask/answers/011915/what-difference-between-gross-income-and-earned-income.asp
