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Learn how federal and state taxes affect your Social Security benefits based on your income level and filing status. Find out how to calculate your taxable benefits and how to withhold taxes from your payments.
Learn how your income affects whether you owe taxes on your Social Security benefits and how much. Find out the federal and state rules, the IRS tool to calculate your taxable benefits, and the options to withhold taxes from your payments.
SSDI benefits are potentially taxable, coming under the same set of tax rules as Social Security retirement benefits. Whether you pay taxes on SSDI depends on your provisional income, which is the sum of your adjusted gross income, tax-exempt interest income and half of your SSDI benefits.
Loading up taxable investment accounts with assets that generate lots of income, such as real estate investment trusts, dividend-paying stocks or most types of bonds, can increase the tax hit on your Social Security benefits. An alternative strategy might be putting income-generating investments into tax-deferred accounts such as IRAs and 401(k)s.
Since 2016, the share of Social Security recipients paying taxes on benefit income has inched up from 41 percent to 48 percent, according to Social Security Administration (SSA) data. Over the same period, the amount of taxes they’ve paid has increased by nearly half, from $32.8 billion in 2016 to $48.6 billion in 2022.
Whether or not your Social Security payments are taxed is determined by your provisional income, not your age. If your provisional income is above a certain threshold, you pay federal taxes on a portion of your benefits, regardless of your age.
Use AARP's federal tax calculator to enter your income, deductions and credits and get an estimate of your total taxes for 2024. See your tax bracket, refund or amount you may owe, and compare standard and itemized deductions.
Active-duty military personnel have been covered — paying Social Security taxes on their service pay — since 1957, so the WEP is not a factor. Nor does it apply to reservists, who didn’t start paying into Social Security from their service income until 1988 but are exempt by law from the WEP for service after 1956.
Learn how to deduct Medicare premiums and other medical expenses on your federal income tax return if you itemize deductions. Find out which expenses are eligible, how to calculate them and what exceptions apply.
Social Security does not count both spouses’ incomes against one spouse’s earnings limit, only the income from work while receiving benefits. Learn how your spouse's income affects your benefits if you claim early or collect spousal benefits.