Federal income tax on social security benefits calculator

Social Security benefits are 100% tax-free when your income is low. As your total income goes up, you’ll pay federal income tax on a portion of the benefits while the rest of your Social Security benefits remain tax-free. This taxable portion goes up as your income rises, but it will never exceed 85%. Even if your annual income is $1 million, at least 15% of your Social Security benefits will stay tax-free.

The amount of the taxable Social Security benefits becomes part of your gross income on your tax return. It’s still subject to your normal deductions to arrive at your taxable income. You still pay at your normal tax rates on the taxable amount. 50% or 85% of your benefits being taxable doesn’t mean you’ll lose 50% or 85% of your Social Security to taxes. The actual taxation on your benefits is much less. The tax may actually be zero after applying deductions.

The IRS has a somewhat complex formula to determine how much of your Social Security is taxable and how much of it is tax-free. The formula first calculates a combined income that consists of half of your Social Security benefits plus your other income such as withdrawals from your retirement accounts, interest, dividends, and short-term and long-term capital gains. It also adds any tax-exempt interest from muni bonds. This income is then reduced by a number of above-the-line deductions such as deductible contributions to Traditional IRAs, SEP-IRAs, SIMPLE IRAs, HSAs, deductible self-employment tax, and self-employment health insurance. Finally, this provisional income goes through some thresholds based on your tax filing status (Married Filing Jointly or Single/Head of Household). All of these steps are in Worksheet 1 in IRS Publication 915.

Calculator

You can go through the 19 steps in the worksheet to calculate the amount of social security benefits that will be taxable but the worksheet isn’t the easiest to use. I made an online calculator that helps you calculate much more quickly. After you give three numbers plus your tax filing status, you’ll have your answer by the click of a button.

The calculator works for all types of Social Security benefits. It doesn’t matter whether you’re receiving retirement income benefits, disability benefits, spousal benefits, or survivor benefits as a widow or widower. It only applies to federal taxes though. Different states have different rules on taxing Social Security benefits. State taxes don’t necessarily follow the same rules as the federal government.

When more than 15% of your Social Security is tax-free, additional income outside Social Security will make more of your Social Security benefits taxable, reducing that number toward 15%. Some people call this a tax torpedo, but it’s a misleading term. It gives you the impression that Social Security is taxed more heavily than other income, which is not true. You actually still pay lower taxes than other people with the same income. See why that’s the case in An Unusually High Marginal Tax Rate Means Paying Lower Taxes.

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Federal income tax on social security benefits calculator

Social security benefits tax calculator is in a way concrete answer to often asked question – “Are social security benefits taxable?“. Well, social security benefits are taxable to some people and totally tax-free for others as the taxation depends on the computation of total income and other phaseout values which are again dependent on your tax filing status.

Social security benefits aren’t taxed for people who only have income from Social Security. For all others , who earn any kind of income, it may or may not be taxable. Also, depending on where you live, your state your Social Security benefits may also be taxable in your state. You can refer section 86 of 26 US Code to know more about taxation of social security taxation

  • What Types of Social Security Income Taxable?
  • Social Security Benefits Tax Calculator
  • How to compute taxable part of social security benefits?
  • Should you file tax return if social security taxable ?
  • Stimulus check increase tax on social security benefit?
  • How to Know How Much Social Security Benefits You Received in a Year?
  • Do States in the USA also Tax Social Security Benefits?
  • How to avoid estimated tax payments on social security?

What Types of Social Security Income Taxable?

Actually ,all kinds of social security benefits taxable in the same way. Social security benefits ( you can check estimated social security benefit calculator) include monthly retirement benefits, survivor, and disability benefits.However, social security benefits paid to a child under his or her Social Security number (SSN) is taxable to the child, not the parent.

Exception to this rule is Supplemental Security Income which is a non-taxable as it is not considered part of Social Security benefits and does not figure into the taxable benefit formula.

Use the calculator below to know the amount if your social security benefit that you must include in the tax return as taxable income.

How to compute taxable part of social security benefits?

If you want to compute whether the amount of social security you received is taxable and if taxable, how much, then the first step is to find provisional income .

The provisional income or combined income can be found by Adding Adjusted Gross Income plus Nontaxable interest plus 50% of the social security benefits

Then compare the provisional income with the base amount which is as under for year 2021 & 2022:

Single , Head of Household and Married filing separatelyMarried filing jointlyMarried filing separately who lived together at any point of timer
SS benefit less than $25K, there is no taxable amount out of SSB SS benefit less than $32K, there is no taxable amount out of SSB Fully Taxable .There is no base exemption available
If SS benefit is between $25K & $34K then , taxable portion is 50 % of your SS benefits SS benefit is between $232K & $44K then , taxable portion is 50 % of your SS benefits
If SS benefit exceeds $34K then, taxable portion is 85% of your SS benefits f SS benefit exceeds $44K then, taxable portion is 85% of your SS benefits

For precise computation of taxable amount out of social security benefit use Worksheet 1, of  Pub 915 

Should you file tax return if social security taxable ?

If your social security benefits are taxable, you must report them to IRS by filing appropriate tax return Form 1040 or the Form 1040-SR, U.S. Tax Return for Seniors and filling in the appropriate fields. 

Stimulus check increase tax on social security benefit?

Stimulus checks will not increase your AGI or provisional income because the payments are not included in taxable income. Since your MAGI or provisional income doesn’t increase due to stimulus payment , the tax on your Social Security benefits won’t increase either.

How to Know How Much Social Security Benefits You Received in a Year?

For this, you need to give attention to  Social Security Benefit Statement (Form SSA-1099) showing the total amounts of benefits you received as well as even the taxable part of the social security amount you received during the previous year.

How to Get Back SSA-1099 that was Misplaced?

You can instantly download your replacement form 1099 by using your Social Security account. If you don’t already have an account, you can create one online. To get your replacement Form SSA-1099 or SSA-1042S, select the “Replacement Documents” tab to get the form.

Do States in the USA also Tax Social Security Benefits?

Yes, at least twelve states in United States tax the social security benefits. But, they tax Social Security differently. Some of these states use the same income brackets as the federal government (for example New Mexico ) to tax SSDI benefits, but most have their own legal procedure to compute and tax it.  . List of twelve states that tax social security benefits are :

  1. Colorado
  2. Connecticut
  3. Kansas
  4. Minnesota
  5. Missouri
  6. Montana
  7. Nebraska
  8. New Mexico
  9. Rhode Island
  10. Utah
  11. Vermont
  12. West Virginia

How to avoid estimated tax payments on social security?

If your social security benefits are taxable, you can still avoid estimated tax paymentsby completing Form W-4V, “Voluntary Withholding Request,” and file it with the Social Security Administration.

If you like social security benefit tax calculator, please test our Social Security Disability

How do I calculate how much of my Social Security income is taxable?

For the 2022 tax year (which you will file in 2023), single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.

What is the federal tax rate on Social Security income?

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

How do I calculate my taxable Social Security benefits 2021?

The following ranges of provisional income determine the maximum taxable Social Security. Less than $25,000 single/$32,000 joint: 0% taxable. $25,000 to $34,000 single/$32,000 to $44,000 joint: up to 50% taxable. Greater than $34,000 single/$44,000 joint: up to 85% taxable.