As you probably know, most types of income are taxable. But what about Social Security benefits? Keep reading to learn all the details you need to know about Social Security taxes in 2023.
Do You Need To Pay Taxes on Social Security Benefits?
Yes, you need to pay taxes on Social Security benefits but only if you have another substantial source of income in addition to your benefits. Examples of additional sources of income include:
- Wages
- Interests
- Dividends
- Pensions
- Self-employment income
- Any income that must be included on your tax return
Determining if your benefits are taxable is straightforward. All you have to do is take half of the Social Security money you collected throughout the year and add it to your other income (see list above)
- If you are single and the total is more than $25,000, then part of your Social Security benefits may be taxable.
- If you are married filing jointly, they should take half of their Social Security, plus half of your spouse’s Social Security, and add that to all your and your spouse’s combined income. If that total is more than $32,000, then part of their Social Security may be taxable.
50% of your Social Security benefits may be taxable if you are:
- Filing single, head of household or qualifying widow or widower with $25,000 to $34,000 income.
- Married filing separately and lived apart from their spouse for all of 2020 with $25,000 to $34,000 income.
- Married filing jointly with $32,000 to $44,000 income.
On the other hand, up to 85% of your Social Security benefits may be taxable if you are:
- Filing single, head of household or qualifying widow or widower with more than $34,000 income.
- Married filing jointly with more than $44,000 income.
- Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.
- Married filing separately and lived with their spouse at any time during 2021.
According to the Social Security website, “If you do have to pay taxes on your Social Security benefits, you can make quarterly estimated tax payments to the IRS or choose to have federal taxes withheld from your benefits.”
La Senda Enterprises: Tax Preparation and More
From income tax preparation to bookkeeping, at La Senda enterprises we offer a full range of professional services designed to make your life easier.
We are located in Rancho Cucamonga, California, and serve clients all over the Golden State and beyond. Get in touch today by email at info@lasendaenterpriseinc.com or by phone at 909-466-5522.