Q:

How does someone calculate if they will have to pay income tax on Social Security?

A:

Quick Answer

To determine if they must pay federal income tax on Social Security benefits, taxpayers can calculate their combined incomes and compare them to taxable income thresholds, reports the Social Security Administration. Those whose incomes are beyond the first threshold must pay taxes on up to 50 percent of their Social Security benefits, while those with incomes beyond the second threshold must pay taxes on up to 85 percent of their benefits.

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Full Answer

A taxpayer's combined income is a total of adjusted gross income, nontaxable interest and 50 percent of Social Security benefits, explains the Social Security Administration. Individuals with combined incomes below $25,000 and couples filing jointly with incomes below $32,000 do not have to pay any taxes on their Social Security benefits as of 2015. If individuals have incomes from $25,000 to $32,000 or couples have incomes from $32,000 to $44,000, they are liable for taxes for up to 50 percent of Social Security benefits. Individuals with incomes over $32,000 and couples filing jointly with incomes over $44,000 owe taxes on up to 85 percent of their benefits.

Taxpayers who calculate that they owe taxes on Social Security benefits can file forms to request that Social Security withholds federal income taxes from their benefits, according to the Social Security Administration. Social Security optionally withholds benefits for tax purposes in amounts of 7, 10, 15 and 25 percent.

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