Many people do not realize that they may need to pay income taxes on their Social Security benefits. (This includes monthly retirement benefits, Social Security Disability Insurance benefits, and survivor benefits.) Supplemental Security Income benefits are not taxed.
The good news is that if Social Security benefits are your only income, you will likely be below the taxable level. However, if you have other income, you may have to pay taxes.
If your income is below a certain base amount, your Social Security benefits may not be taxable. The base amount changes annually and depends on marital status and living situation.
To figure out whether any of your benefits may be taxable, add one-half of your yearly benefits plus all of your other income, including tax-exempt interest for the year. If this amount is higher than your base amount, you will likely need to pay taxes on your benefits.
Note that if you are married and file a joint return, you and your spouse must combine your incomes and Social Security benefits. Also, if your spouse did not receive any Social Security benefits, you still must add your spouse’s income to yours when figuring if any of your benefits are taxable (if you file a joint return).