Are Your Social Security Benefits Taxable?

Many retirees are surprised to learn that Social Security income can be taxed—depending on your total income and filing status. It’s not a flat tax, either—just a portion of your benefits may be taxable.

How does it work?

If your combined income (Social Security + other income + tax-exempt interest) exceeds certain thresholds, up to 85% of your Social Security benefits could be subject to federal tax.

Filing status base thresholds for Single or Head of Household filers is $25,000 and for Married Filing Jointly filers is $32,000.

The higher your income, the greater the portion of Social Security that becomes taxable.

Strategies to Reduce the Tax Hit

With smart planning, you may be able to minimize or even avoid taxes on your benefits. Some common approaches include:

• Managing retirement account withdrawals (especially RMDs)

• Considering Roth conversions to reduce taxable income in future years

• Making Qualified Charitable Distributions (QCDs) from IRAs if you're over age 70½

Each of these strategies has its own rules, but they can make a meaningful difference when done correctly.

Want to learn more? Check out this helpful Kiplinger article that breaks it down into plain English.