Do I Have to Pay Taxes on Social Security Benefits?

Whether you owe income tax on Social Security benefits depends on your total income — specifically your "combined income," which is your adjusted gross income plus non-taxable interest plus half of your Social Security benefits. If your combined income is below $25,000 (single filers) or $32,000 (married filing jointly), your Social Security benefits are completely tax-free. If your combined income is between $25,000 and $34,000 (single) or $32,000 and $44,000 (joint), up to 50% of your benefits may be taxable. Above those upper thresholds, up to 85% of your Social Security benefits may be subject to federal income tax. The maximum taxable portion is 85% — the law doesn't allow 100% of benefits to be taxable. These income thresholds have not been adjusted for inflation since they were set in 1983 and 1993, which means that over time, more retirees have been subject to taxation on their benefits than was originally intended. Most states do not tax Social Security benefits, though about a dozen states do to varying degrees.