Social Security is taxable when the recipient's combined income exceeds certain thresholds, according to the Social Security Administration. The amount of Social Security that is taxed varies with income, up to a maximum of 85 percent of the gross payment.
For taxable Social Security purposes, combined income is all other income on the tax return, including any belonging to the taxpayer's spouse, any nontaxable interest income and one-half of the Social Security received, including the spouse's. Exclusions or adjustments such as foreign income and adoption benefits are also added, according to the IRS. If the taxpayer files as single, head of household, qualifying widow or widower, or married filing separate and not living with spouse, the threshold is $25,000. For married filing joint taxpayers, the threshold is $32,000. Individuals who are living with their spouse but choose to file separately have a threshold of $0.