T. Rowe Price Personal Investor - What to Know About Social Security Benefits and Your Taxes (2024)

FAQs

How to determine how much of your Social Security benefits are taxable? ›

You report the taxable portion of your social security benefits on line 6b of Form 1040 or Form 1040-SR. Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.

We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits. Your benefits may increase when you work: As long as you continue to work, even if you are receiving benefits, you will continue to pay Social Security taxes on your earnings.

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

Share: You aren't taxed on Social Security Benefits for your Dependents. Since your child is the person with the legal right to receive these Social Security Benefits, they're only taxable to her. These benefits are reported on her return if she files a return.

For tax year 2023, the additional standard deduction amounts for taxpayers who are 65 and older or blind are: $1,850 for single or head of household.

Pension payments, annuities, and the interest or dividends from your savings and investments are not earnings for Social Security purposes.

The Social Security five-year rule is the time period in which you can file for an expedited reinstatement after your Social Security disability benefits have been terminated completely due to work.

Your Social Security benefit might be reduced if you get a pension from an employer who wasn't required to withhold Social Security taxes. This reduction is called the “Windfall Elimination Provision” (WEP). It most commonly affects government work or work in other countries.

Up to 50% of your Social Security benefits are taxable if: You file a federal tax return as an "individual" and your combined income is between $25,000 and $34,000. You file a joint return, and you and your spouse have a combined income between $32,000 and $44,000.

You would not be required to file a tax return. But you might want to file a return, because even though you are not required to pay taxes on your Social Security, you may be able to get a refund of any money withheld from your paycheck for taxes.

Do I have to file a tax return if my only income is Social Security? ›

Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.

If the original overpayment, not the balance, is $1,000.00 or less, the recipient, representative payee, or other authorized representative may make a verbal waiver request. Technicians may not initiate waiver processing unless the debtor (or representative) requests a waiver.

If you're younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you're younger than full retirement age during all of 2024, we must deduct $1 from your benefits for each $2 you earn above $22,320.

The Bottom Line. The qualifications for Social Security are the same, whether you're self-employed or work for someone else. Self-employed individuals earn Social Security work credits the same way employees do and qualify for benefits based on their work credits and earnings.

However, the double-taxation of Social Security benefits can occur at the state level. A grand total of 38 states don't tax Social Security benefits. But if you live in one of the 12 states that do tax Social Security benefits, and earn above the preset income thresholds in those states, double taxation can occur.