If Social Security benefits are your only income, they're probably not taxable. Even if you have other income, you still might not owe tax on your benefits. IRS Publication 915 explains how to calculate if there's a tax on your benefits, and how to file the tax payment if there is. You can also find a worksheet in the instructions for Form 1040 .
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If you received Social Security benefits last year, whether retirement or disability, the Social Security Administration will send you an SSA-1099 form. This shows your total Social Security income for the year, though it might not match the amount you received. The Social Security Administration can adjust the amount it pays out if, for example, you want your Medicare premiums deducted from your Social Security check, or you think you'll owe taxes and request tax withholding on your benefits. The 1099 notes these adjustments.
When Benefits Are Taxable
The instructions for Form 1040 include a worksheet for figuring whether your benefits are taxable. To start. take the net benefits in Box 5 of the SSA-1099, enter it on the worksheet, then write half that figure on the next line. If you're filing a joint return, include your spouse's benefits too.
The instructions and dollar figures below are
for 2014, the most recent tax year at time of writing. The federal government periodically revises its tax rules, so always review the most recent IRS information before filing.
Report your other taxable income from the front of the 1040. Include your tax-exempt interest, but not any money you made from qualified dividends. Add the total of your other income to half your Social Security benefits.
Add up all the income adjustments you entered on Form 1040, lines 23 through 32, plus anything from line 36. If the total adjustments are more than the result from Step Two, your benefits aren't taxable. If the adjustments are less, subtract them from your Step Two income.
If you're married, filing jointly, write down $32,000. If you file under any other status, write down $25,000. If the total of your adjusted income is under this figure — what the IRS calls your base amount — your benefits aren't taxable.
If you're married, file separate returns, but lived together for part of the year, your Social Security benefits are taxable. Take 85 percent of your adjusted income on the worksheet, then multiply your net benefits by 85 percent. Report the smaller of the two figures as your total taxable benefits on Form 1040.