Are you wondering, how much Social Security will I get? It’s a good question, but what really matters is how much you’ll get to keep. There’s a good chance that you will have to pay some of the money you receive from the Social Security Administration to the IRS.
True, there have been some recent rumblings in Washington about ending taxes on Social Security benefits…but as of May 2025, it was still unclear whether that will occur. In the meantime, Bottom Line Personal asked Social Security expert Martha Shedden what people need to know about the Social Security benefits taxation rules currently in place…
1. Inflation has expanded this tax hit
When Social Security benefits started being taxed in the 1980s, less than 10% of benefit recipients were affected. But now the majority of people who receive benefits must pay federal income taxes on some of their benefits. The income thresholds that determine whose benefits are taxed have never been adjusted to keep pace with inflation, so a tax that initially affected only high earners now affects people with moderate incomes as well—especially after the sharp inflation of recent years.
2. Only a portion of Social Security benefits are taxed
If you’re married filing jointly, up to 50% of your benefits are subject to income taxes if your “combined annual income” is between $32,000 and $44,000…but up to 85% are subject to tax if your combined income exceeds $44,000. If you file your taxes as a single taxpayer, those already low thresholds drop to $25,000 and $34,000, respectively.
To calculate your combined annual income: Start with your and your spouse’s (if married) Adjusted Gross Income (AGI), not including any Social Security income. Now add in only 50% (half) of the total Social Security income, and then add any tax-exempt interest received.
People sometimes ask, “What’s the Social Security tax rate?” There is no special rate—the same income tax brackets and rates apply to the taxable portion of Social Security benefits as to other income.
3. Some states also tax Social Security benefits
Federal taxes might not be the only taxes you have to pay on your Social Security benefits. Your state might want a slice of your benefits, too. The list of states that tax Social Security benefits has been shrinking, but as of early 2025, there still are nine that do so—Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia. West Virginia is in the process of phasing out this tax.
4. You’re never too old to pay Social Security taxes
There’s a common misconception that the taxation of Social Security benefits ends when taxpayers reach a certain age. Reality: There is no such age cap. This confusion might be caused by the fact that some other Social Security–related taxes and tax-like consequences do eventually end. Examples: The “withholding” that affects those who are collecting benefits and also have substantial earned income ends when they reach full retirement age. Also, payroll taxes that fund the Social Security system end when people retire and no longer have any earned income.
5. Social Security retirement, spousal and survivor benefits aren’t the only Social Security benefits that can be taxed
The same tax rules and thresholds also apply to Social Security disability income.
6. Withholding can be wise
Just as employees often have money withheld from their paychecks to avoid big year-end tax bills, Social Security recipients can have money withheld from their benefit payments. Complete IRS Form W-4V, Voluntary Withholding Request, to set up this withholding or adjust your withholding rate. A tax preparer or financial advisor can help you determine if withholding makes sense for you. Paying estimated quarterly taxes is another option.
7. It’s usually unwise to start one’s benefits while still in the workforce
If you start your benefits while still earning a significant income, that only increases the odds that up to 85% of your Social Security benefits will be taxed at a relatively steep income tax rate. Postponing the start of benefits at least until retirement—though not beyond the month of your 70th birthday—could lead to a lower overall tax bill.
