Social Security is Only Source of Income
"If the only income you received during the tax year was your social security or equivalent railroad retirement benefits, your benefits are probably not taxable and you probably will not have to file a tax return," according to the IRS, Tax Topics 423.
Taxable Social Security
Social Security benefits are taxed depending on your total income from all sources. Here's how to calculate how much of your Social Security benefits is taxable.Provisional Income
Provisional income is your total worldwide income, including tax-exempt income, plus half of your Social Security benefits.
Base Amounts
The following base amounts are used in figuring your taxable Social Security:
Filing Status Base Additional* Married couples who file separate tax returns have two different methods for computing the taxable portion of their Social Security benefits.
Single $25,000 $34,000
Head of Household $25,000 $34,000
Married Filing Jointly $32,000 $44,000
Married Filing Separately $0*
Qualifying Widow(er) $25,000 $34,000
For married couples who lived in the same household at any time during the year, their base amount is zero. Up to 85% of their benefits will be subject to tax.
For married couple who lived apart from each other for the entire year, they can use a base amount of $25,000 and the additional income amount of $34,000 for computing the taxable portion of their benefits.
Taxable Social Security Benefits
If your provisional income is below the base amounts for your filing status, then your Social Security benefits are completely non-taxable.
If you provisional income is between the base amount and the additional amount, then half of your Social Security benefits over the base amount are taxable.
If your provisional income is over the additional amount, then $4,500 (or $6,000 if Married Filing Jointly) plus 85% of your Social Security benefits over the additional amount are taxable.
The taxable portion of your Social Security benefits cannot exceed 85% of your total benefits.
Essential Tax Resources
You may need to rely on the following information from the IRS regarding the tax treatment of your Social Security Benefits:- Social Security and Equivalent Railroad Retirement Benefits (Tax Topic 423)
- Social Security and Equivalent Railroad Retirement Benefits (Publication 915)
- Social Security and Equivalent Railroad Retirement Benefits (from Publication 17)
- JK Lasser's Your Income Tax, Chapter 34, providing useful information on Social Security and tax planning tips for senior citizens.
