When You Need to Pay Taxes on Social Security

Here's how to find out if you'll pay tax on your Social Security benefits.

When to Pay Taxes on Social Security

Cheerful old man resting at home.

Getty Images

If you know you’ll owe Social Security taxes, you can choose to make quarterly estimated tax payments to the IRS. You might also opt to have federal taxes withheld from your benefit.

Key Takeaways:

  • If you have income from multiple sources in retirement, such as pensions, withdrawals from retirement accounts or side jobs, you may have to pay taxes on part of your Social Security benefits.
  • How your Social Security benefits are taxed depends on your combined income and filing status. Income thresholds determine whether your benefits will be taxed at 0%, 50%, or 85%.
  • For tax planning purposes, you can withhold federal taxes from your Social Security benefits.
  • Check your state tax laws; some states tax Social Security income while others do not.
  • You could reduce the amount you owe in taxes on your Social Security benefit through several strategies, such as converting traditional retirement accounts to Roth IRAs.

While Social Security benefits are designed to provide a safety net, they are not always tax-free. Knowing whether you’ll owe taxes on the benefits you receive is important as you budget for retirement.

To determine if your Social Security benefit is taxable, you’ll first want to know how much income you earn each year as a retiree. If you have money coming in from different sources, such as retirement account withdrawals or a side job, you could have to pay taxes on part of your Social Security benefit. The federal government taxes up to 85% of Social Security payments for retirees who earn above a certain threshold.

To know if you owe taxes on Social Security, consider the following:

  • Is my Social Security income taxable?
  • How to calculate your Social Security tax rate.
  • How to withhold federal taxes from your Social Security benefit.
  • Your state taxes can impact Social Security income.
  • How to minimize your Social Security taxes.

Is My Social Security Income Taxable?

The average Social Security retirement benefit was $1,860.23 in January 2024. If Social Security is your sole source of income in retirement, you can expect to keep the full amount. “A retiree with only Social Security income will pay no taxes on their benefits because Social Security by itself is not taxable,” said David Globke, vice president of SFA Wealth Management in Murfreesboro, Tennessee, in an email.

However, if you bring in more income, you could have to pay taxes on part of the benefit. To find out what you'll owe, add your adjusted gross income plus your nontaxable interest and half of your Social Security benefit. If the amount is more than $25,000 as an individual or $32,000 as a married couple, you will need to pay federal income taxes on part of your Social Security income.

As for an individual who receives Social Security benefits as their only source of income, “if that same retiree starts taking distributions from an IRA and receiving income from a small pension in addition to their Social Security benefits, their previously tax-free Social Security benefits could potentially be taxed,” Globke said. That’s because the increase in their modified adjusted gross income could put them over the earnings threshold.

How to Calculate Your Social Security Tax Rate

For taxes on Social Security benefits, “There are three possible tax percentages: 0%, 50% or 85%,” said Lamar Brabham, CEO and founder of Noel Taylor Agency in North Myrtle Beach, South Carolina, in an email. It depends on your combined income and filing status. You won't pay taxes on your Social Security benefit if you have a combined income of less than $25,000 as an individual or $32,000 as a couple.

If you earn more, the breakdown is as follows:

  • Individuals with a combined income between $25,000 and $34,000 may be taxed on 50% of their Social Security benefits.
  • If your combined income as an individual exceeds $34,000, 85% of your Social Security benefits may be taxable.
  • Married couples with a combined income between $32,000 and $44,000 may be taxed on 50% of their Social Security benefits.
  • Married couples with a combined income that exceeds $44,000 may be taxed on 85% of their Social Security benefits.

Once you start receiving Social Security, you’ll receive a Social Security benefit statement called the Form SSA-1099 every January. This report lists the benefits you received during the past year. You can use this document to find the total amount of your annual Social Security payments and calculate if your Social Security benefit will be subject to tax. You can also find this form in your My Social Security account.

How to Withhold Federal Taxes From Your Social Security Benefit

If you know you’ll owe Social Security taxes, you can choose to make quarterly estimated tax payments to the IRS. You might also opt to have federal taxes withheld from your benefit. To do this, you’ll fill out IRS Form W-4V. You can download the form at the Social Security Administration website. Take your completed form to your local Social Security office or send it back by mail or fax. Taking these steps can make it easier to budget and avoid missed payments.

Your State Taxes Can Impact Social Security Income

“It’s important for retirees to consider local and state taxes, as these vary widely and can significantly impact overall tax burdens,” said Zachary Hellman, an enrolled agent and owner of Los Angeles-based Tax Prep Tech, in an email. “States with no income tax or favorable treatment of retirement income can offer advantages, while others with higher taxes might pose a greater burden." States that tax Social Security income include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont and West Virginia. In some cases, lower-income seniors may not be subject to Social Security taxes.

How to Minimize Your Social Security Taxes

“Given that you have some control over your tax-exempt income and your adjusted gross income, you may be able to reduce taxes on Social Security and possibly eliminate them completely,” Brabham said. One often-used strategy is to convert qualified money such as IRAs, 401(k)s, or 403(b)s to Roth accounts. When this is done, any distributions or withdrawals that you take are tax-free and not included in your combined income calculations. “This method of mitigating taxes on Social Security can be particularly impactful once you reach the required minimum distribution age,” Brabham said. “This is when you are forced to withdraw a certain percentage of your qualified accounts.” When that occurs, it will often cause your combined income to increase, which could lead to taxes on your Social Security benefit.

If you decide to work during retirement, you could carry out an analysis to see what your annual income will be. If it impacts your combined income and triggers taxes on your Social Security benefit, you’ll want to consider whether the earnings are worthwhile. You may feel that the benefits of working and staying active outweigh the tax costs, or you may try to keep your earnings under a certain threshold to reduce the tax burden.

Updated on Feb. 21, 2024: This story was published at an earlier date and has been updated with new information.

Comparative assessments and other editorial opinions are those of U.S. News and have not been previously reviewed, approved or endorsed by any other entities, such as banks, credit card issuers or travel companies. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired.

Read More

Subscribe to our daily newsletter to get investing advice, rankings and stock market news.

See a newsletter example.