How to calculate whether your Social Security benefits are taxable

To calculate whether your social security benefits are taxable, you will need to know if your combined income falls within the IRS threshold

Table of Contents:

How much of my social security is taxable in 2022?

How much of my social security income is taxable?

At what age do you stop paying taxes on social security?

How do I calculate my taxable social security benefits?

How much of my Social Security income is taxable?

What percentage of Social Security is taxable in 2022?

At what age is Social Security not taxable?

Is Social Security taxed after age 70?

How much can you make without paying taxes over 65?

What is the 2021 Social Security tax rate?

Does Social Security count as income?

How much of my social security is taxable in 2022?

As of 2022, the social security tax rate is divided equally between the employer and the employee. Each one of these two parties is obliged to pay 6.2% for the Social Security tax. The Social Security tax limit is revaluated each year and the Social Security tax limit 2022 specifically will be up to $147,000. This means that the taxable social security was increased from what it previously was set at, which was $142,800. This further means that the maximum Social Security tax any employee will be called to pay from their pay check is $9,114.  

How much of my social security income is taxable?

Currently, the social security income that is taxable can never be more than 85% of your Social Security income. With that in mind, different circumstances will lead to you needing to pay different amounts of tax on your social security income. 

For example, for single filers, if your combined income when filing taxes falls between $25,00 and $34,000 you will be called to pay taxes for up to 50% of your Social Security Benefits. If your combined income surpasses $34,000 then you could be made to pay for up to 85% of your Social Security benefits. 

These limits change for married couples, you are only called to pay tax for up to 50% of their Social Security Benefits if they have a combined income between $32,000 and $44,000. If their combined income surpasses the $44,000 mark then they need to pay taxes for up to 85% of their social security income. 

Therefore, knowing your specific circumstance will allow you to better determine what part of your Social Security income you will be called to pay taxes on. No matter how much your income is you will never be made to pay income taxes on more than 85% of your social security income. 

At what age do you stop paying taxes on social security?

The answer to this question will greatly vary depending on what your income continues to be even as you enter a later age. Normally, once you reach the age of 62 you are eligible to start collecting from your Social Security benefits, however, these benefits may continue to be taxed if you are depending on other sources of income. This means that if at a later age you are using your investments and other incomes to support your lifestyle you may be called to continue paying taxes on your social security benefits. If you do not have other large sources of income then after the age of 62 you may be able to start using your social security benefits without having to pay income taxes on them. 

To determine all of this, and to see whether your income allows you to gain your benefits without them being taxed you will need to compare your income to the IRS threshold that is put in place to determine who should be paying taxes on the social security benefits that they are receiving. 

How do I calculate my taxable social security benefits?

To calculate whether you will be called to pay taxes on your social security benefits you will need to follow a simple step and fill out a simple equation. Adding up your income from all sources with 50% of your Social Security Benefits will give you the amount that is known as your ‘combined income’. If that combined income is above the limit that the IRS sets, then you will be made to pay taxes on a part of your social security benefits. What part of them that will be will depend on your specific situation. 

The limits are: 

• $25,000 for single filers
• $32,000 for joint filers

To try and determine the taxable social security benefits that you will be receiving you can use an online calculator. By adding all of your information there you will be able to see how much of the amount that you are getting is going to be taxed.  

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How much of my Social Security income is taxable?

The amount of your Social Security income that is taxable will depend on whether you are filing taxes as a single filer or as a joint filer. Regardless of how you fight you will never be taxed for more than 85% of your Social Security income. 

For Single Filers:

• If your combined income ranges between $25,000 and $34,000 you will be called to pay taxes on 50% of your Social Security benefits
• If your combined income is higher than $34,000 then you will need to pay taxes on 85% of your Social Security benefits

For Joint Filers: 

• If your combined income ranges between $32,000 and $44,000 you will be called to pay taxes on 50% of your Social Security benefits
• If your combined income is higher than $44,000 then you will need to pay taxes on 85% of your Social Security benefits

What percentage of Social Security is taxable in 2022?

The maximum percentage of your Social Security benefits that is taxable in 2022 remains 85% of your social security income. 

The social security tax rate on your income remains the same with 6.2% being charged to the employer and 6.2% being withheld from the employee. The social security limit for 2022 is $147,000 which means that the absolute maximum amount that you can pay on social security taxes is $9,114. 

At what age is Social Security not taxable?

For Social Security benefits to stop being taxable, you will need to fit certain prerequisites. In most cases, after you reach the age of 64 you can access your Social Security benefits without having to pay taxes on them. However, there is one small caveat to this. If even after the age of 62 you are depending on income other than the one you get from your social security benefits to sustain a major part of your life then you may be required to continue paying taxes on your social security benefits even after the age of 62. 

Is Social Security taxed after age 70?

Social Security may continue to be taxed after you reach the age of 70 if you fit the thresholds set forth by the IRS regarding the amount of Social Security benefits that are taxable. Regardless of your age, the thresholds set forth by the IRS do not change. This means that depending on how you file your taxes you may be called to pay further taxes on your social security benefits. This in part is done in cases where the income earned through other sources is the one mainly used to sustain your life, rather than using the Social Security benefits as your predominant income source. 

For Single Filers:

• For a combined income that ranges between $25,000 and $34,000 you will be called to pay taxes on 50% of your Social Security benefits
• For a combined income that is higher than $34,000 then you will need to pay taxes on 85% of your Social Security benefits

For Joint Filers: 

• For a combined income that ranges between $32,000 and $44,000 you will be called to pay taxes on 50% of your Social Security benefits
• For a combined income that is higher than $44,000 then you will need to pay taxes on 85% of your Social Security benefits

How much can you make without paying taxes over 65?

If you are over the age of 65 and would like to avoid paying a tax on the Social Security benefits that you are receiving then you will need to make sure that your combined income does not fall within the ranges set forth by the IRS. This means that if you are a single filer, you will want your combined income to fall below $24,999 and if you are a joint filer then you will need your combined income to be $31,999. Adhering to these limits is the only certain way of avoiding taxes on your social security benefits. Be aware that if you are married but filing separately you may be called to pay taxes on up to 85% of your social security benefits even if your income is $0. This means that when filing separately the normal thresholds set by the IRS no longer apply. 

To avoid taxes on your social security benefits after the age of 65: 

• As a single filer, ensure that your combined income is below $24,999
• A joint filer, ensure that your combined income is below $31,999
• If married do not file separately as it could lead to you paying taxes on up to 85% of your social security benefits

What is the 2021 Social Security tax rate?

The social security tax rate is not often adjusted which means that the 2021 social security tax rate is no different than the one it was the years before. The current social security tax rate is 12.4%. That percentage is divided equally between the employer and the employee. This means that on your income you will find a withheld amount of 6.2%. The maximum taxable income for your social security for 2022 is $147,000. Anything above that amount remains untaxed. It is important to remember that the Social Security tax is regressive, which means that it is the absolute same regardless of the income that you are getting. 

In cases of self-employment, the full cost of the Social Security taxes will fall on you as there is no employer to cover 50% of the charge. This means that those who are self-employed will need to pay the full 12.4% out of their income. This once again is only true for up to $147,000. If you are earning more than that then you will only be taxed 12.4% on that $147,000.

• The Social Security tax limit for 2022 is $147,000
• The Social Security tax rate is 12.4% 
• If self-employed the full tax rate is paid by the individual
• If employed in a company the cost of social security is equally divided between the employer and the employee

Does Social Security count as income?

In most cases, your Social Security is taxable under your income tax. However, you will never be made to pay income tax on 100% of your social security benefits. Instead after calculating your combined income, you will be able to use the IRS thresholds to determine whether the amount that the percentage of your social security benefits that will be taxed will be up to 50% or up to 85%. To determine that you will need to know the threshold based on your filing status. 

For Single Filers:

• The combined income threshold as set by the IRS for paying taxes on 50% of your social security benefits is $25,000 and $34,000 
• If your combined income is above that threshold then you will be called to pay taxes on 85% of your Social Security benefits

For Joint Filers: 

• The combined income threshold as set by the IRS for paying taxes on 50% of your social security benefits is $32,000 and $44,000
• If your combined income is above that threshold then you will be called to pay taxes on 85% of your Social Security benefits

Summary

The social security tax rate has remained the same for many years, however, the social security limit is constantly readjusted and changed yearly. Thus, to determine how much you would pay on your social security tax rate you will need to know what the limit is. Depending on your combined income you may also be called to pay income tax on up to 85% of your social security benefits.