When it comes tax season with its barrage of mind-boggling forms and detailed calculations, getting your personal finances in order can seem like a herculean task, especially if you’re not entirely sure about the rules.
For example, if you receive Social Security benefits from the government, that money is subject to tax. The amount you have to pay varies based on your income and whether you’re filing a joint or individual return.
To walk you through the process, here’s a guide to the formula the IRS uses to determine how much you’ll owe on your benefits.
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What are the new 2023 tax brackets? Answers here
Is Social Security taxable?
Yes. Internal Revenue Service rules state that many who receive Social Security benefits will have to pay income tax on that money.
The amount you pay is determined by a calculation involving what the IRS calls “combined income.”
The combined income is: your adjusted gross income + non-taxable interest + ½ of your social security benefits.
Up to 85% of social security benefits are taxable if:
You file a federal tax return as an “individual” and your combined income is more than $34,000.
You file a joint return and you and your spouse have a combined income of more than $44,000.
Up to 50% of social security benefits are taxable if:
You file a federal tax return as an “individual” and your combined income is between $25,000 and $34,000.
You file a joint return and you and your spouse have a combined income of between $32,000 and $44,000.
1099, F-4, F-2, F-9, 1040: What are these tax return forms for?
How do I get my SSA-1099?
To help you figure out how much you received in benefits during the year, the Social Security Administration should send you a form in January.
This is your Statement of Social Security Benefits, or SSA-1099, and can be used to figure out how much you owe when filing your federal income tax return.
For everyone receiving benefits, the SSA-1099 should automatically be mailed to you. If you don’t receive it, a printable version should be available online after you create a “my Social Security” account.
Are you ready to file your taxes? Here’s everything you need to know to file your taxes in 2023.
This article originally appeared in USA TODAY: Is Social Security Taxable? Find out how the 2023 rates are calculated