Is Your Social Security Taxable?
I had a client call with an interesting question:
My husband is planning to wait until he turns 66 to take his Social Security. If he continues to work, will his Social Security be taxed?
Before I go into detail I want to stress that all tax questions need to be referred to a certified tax professional. However, since I’ve been getting questions of this nature quite often lately, I’ll share a little information on the subject.
The way the IRS computes tax rates on Social Security and other income is as follows:
Take half of your annual Social Security income and add your other income. The table below will breakdown where you would owe taxes on Social Security. The total amount of Social Security that can be taxed is capped at 85%.
Married filing jointly: $32000.00
Filing Single: $25000.00
If half of your benefits, plus all other income is more than $34000 if single, or $44000 married jointly, then 85% of your benefits are taxable. Please consult your tax professional for the exact amount you will owe.
Again, consult your tax professional for further questions. If you want to get a more accurate idea of how much of your benefits will be subject to tax, the IRS has a worksheet in Publication 915 (link opens PDF) that can help you do just that.