2025 is just around the corner, and it’s time to start thinking about your 2024 taxes. For many Americans, tax season is a key moment to assess their financial situation. Millions depend on Social Security as a primary income source—especially retirees and individuals with disabilities who can no longer work.
Even if you’re not required to file taxes, it could make a big difference. Why? The Social Security Administration (SSA) distributed over $121.4 billion to around 68.1 million beneficiaries in August 2024 alone. Some of these payments are taxable depending on your income and marital status. Since 1984, individuals earning above certain thresholds have been required to pay taxes on their Social Security benefits.
Here’s everything you need to know about how Social Security benefits are taxed, how it affects your finances, and steps you can take to prepare.
Are Your Social Security Benefits Taxable?
Determining if your benefits are taxable is easier than you might think. Follow these steps:
- Add up half of your Social Security benefits.
- Include any other income you earned, like wages, self-employment income, interest, or dividends.
- Compare the total to the IRS base amount for your marital status.
Here are the base amounts set by the IRS:
- $25,000 for single filers, heads of households, or surviving spouses.
- $25,000 for those married filing separately and living apart from their spouse all year.
- $32,000 for married couples filing jointly.
- $0 if you’re married, filing separately, and living with your spouse during the year.
What Happens if You Exceed the Base Amount?
If your income goes over the base amount, you may owe taxes on your Social Security benefits:
- For single filers:
- If your total is between $25,000 and $34,000, up to 50% of your benefits may be taxed.
- If it’s more than $34,000, up to 85% of your benefits may be taxable.
- For joint filers:
- Income between $32,000 and $44,000 means up to 50% of benefits could be taxed.
- Above $44,000, up to 85% of benefits may be taxable.
- For married filing separately:
- If you lived with your spouse, all benefits are likely taxable.
- If you lived apart, the same rules as single filers apply.
What If You Owe Taxes?
If you owe taxes on your Social Security benefits, you can have the taxes withheld directly from your monthly payments. This avoids any surprises when you file your taxes.
You’ll need to file a tax return if:
- You’re over 65 and single, with a gross income of over $14,700.
- You file jointly with a spouse (65 or older), and your combined income exceeds $28,700.
- You file jointly with a spouse (under 65), and your combined income exceeds $27,300.
How to Report Taxable Benefits
The taxable portion of your Social Security benefits must be reported on line 6b of Form 1040 or 1040-SR. Be sure to include all necessary documentation when you file.
Filing taxes may seem daunting, but understanding these guidelines can save you money and reduce stress. Take the time to review your income, explore possible deductions or credits, and make the most of this year’s tax season.
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Archer Bannister is a journalist with 4 years of experience covering hard-hitting stories. Currently working with Mikeandjonpodcast, Archer specializes in delivering timely and in-depth updates on a variety of topics, including crime news, politics, and national issues affecting the USA. His expertise and dedication to delivering accurate, impactful news make him a trusted voice for audiences seeking to stay informed on critical topics.
