- A person who files as an individual and has a combined income between $34,000 and $25,000 may pay tax on as much as 50 percent of benefits.
- An individual who reports more than $44,000 may have to pay tax on as much as 85 percent of benefits.
- Married individuals who file separately may have to pay taxes on benefits regardless of income.
- Individuals who earn more than $34,000 may pay tax on as much as 85 percent of benefits.
Income limits are higher for married filers who file jointly. For easy reference, remember that combined income is equal to one-half of Social Security benefits plus nontaxable interest plus AGI. Social Security recipients receive a statement every January that is titled Form SSA-1099. It shows the total benefit amount received for the previous year. When filling out a federal tax form, be sure to keep this important document on hand. If a person who lives in the United States has misplaced a 1099 or did not receive one for the previous tax year, it is possible to get a replacement form online by logging into a personal Social Security account. Those who have not yet set up an account can quickly and easily do so on the SSA's main site. The form is found under the replacement documents tab, which is accessible when logged in.
People who are required to pay annual income taxes on their Social Security benefits can make quarterly payments to offset any amount owed for the next tax year. While this is optional, some taxpayers find it easier to make four payments instead of one lump sum when tax time arrives. Another option is to contact Social Security to ask for some benefits to be withheld for paying taxes. IRS Publication 915 is the best document to read for more in-depth information about taxing Social Security benefits and other benefits.
To learn more about this topic, speak with an agent 314-351-HALO(4256).