How do i calculate my taxable social security benefits 2022

IRS Tax Tip 2022-22, February 9, 2022

A new tax season has arrived. The IRS reminds taxpayers receiving Social Security benefits that they may have to pay federal income tax on a portion of those benefits.

Social Security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income payments, which aren't taxable.

The portion of benefits that are taxable depends on the taxpayer's income and filing status.

To determine if their benefits are taxable, taxpayers should take half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends and capital gains.

• If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable.
• If they are married filing jointly, they should take half of their Social Security, plus half of their spouse's Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable.

Fifty percent of a taxpayer's benefits may be taxable if they are:

• Filing single, head of household or qualifying widow or widower with $25,000 to $34,000 income.
• Married filing separately and lived apart from their spouse for all of 2020 with $25,000 to $34,000 income.
• Married filing jointly with $32,000 to $44,000 income.

Up to 85% of a taxpayer's benefits may be taxable if they are:

• Filing single, head of household or qualifying widow or widower with more than $34,000 income.
• Married filing jointly with more than $44,000 income.
• Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.
• Married filing separately and lived with their spouse at any time during 2021.

More information:

• Social Security Income
• Are My Social Security or Railroad Retirement Tier I Benefits Taxable?
• Publication 915, Social Security and Equivalent Railroad Retirement Benefits

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Did you know that up to 85% of your Social Security benefits may be subject to income tax? If this is your situation, you may want to consider repositioning some of your other income to minimize how much of your Social Security benefit may be taxed and thereby, maximize your retirement income sources. Use our Social Security tax calculator to better calculate your Social Security benefits.

How Much Do You Get for Social Security Retirement?

How much you get for Social Security retirement benefits will depend on a number of factors, including your income, how long you worked and when you retired. One thing you’ll need to consider when getting your retirement benefits or when planning for Social Security retirement is that it may be taxed.

If you have a combined income but are filing as an individual, your benefits aren’t taxed if your benefits are below $25,000. If your income is above that but is below $34,000, up to half of your benefits may be taxable. For incomes of over $34,000, up to 85% of your retirement benefits may be taxed.

For the purposes of taxation, your combined income is defined as the total of your adjusted gross income plus half of your Social Security benefits plus nontaxable interest. Other wages that may be applied to this include self-employment income, wages, capital gains and dividends or other investment income from interest, annuities, pensions, rental property profits, municipal bond interest and withdrawals from retirement accounts such as IRAs, 403(b) and 401(k) accounts. Roth IRA withdrawals don’t count toward combined income.

You can use the Money Help Center calculator to determine how much Social Security you will get and how income tax may impact your benefits and income. You need to plan for retirement by considering how you will be taxed once your working life ends. You don’t want to get an unpleasant surprise when you start earning your retirement income or getting your benefits and realize it is less than you expected because of tax withdrawals.

At the same time, Social Security can be a smart part of your retirement plan. Even if you are taxed at the highest level, you may still benefit. After all, from virtually any other source of income, 100% of your wages and income will be taxed after retirement. Dollar for dollar, Social Security retirement benefits can still be a better deal as far as taxation, than other sources of retirement.

As you plan for your golden years, it is important to keep in mind all the sources of income you may have once you finish working. Plan ahead and consider the tax impact on your income as well as any tax advantages you can secure today while saving for retirement. Use the Money Help Center calculators to help you plan. Our calculators are free, have no bias and never ask you for your personal information, such as contact information or e-mail address. You can use them at any time and instantly get information to help you plan for your financial future.