Is Social Security Taxable?

Mar 7, 2014 by

bike route between SSA and IRS

SSA-IRS cycling route

The headquarters of the Internal Revenue Service is at 1111 Constitution Avenue in Washington, D.C. The Social Security Administration building is at 330 Independence Avenue—a 5-minute bike ride from the IRS, according to god Google.

Wouldn’t it be a lot simpler to cut out the middleperson—the hapless taxpayer—and have a bike courier deliver to the IRS a single income tax withholding check on behalf of all the folks who received taxable Social Security benefits during the prior year?

But I digress.

Are Social Security Benefits Taxable?

Have you ever noticed that there is virtually no question one can ask about U.S. federal income tax for which the correct answer is definitively “yes” or “no”? The answer to any tax question is almost invariably “maybe” or “sometimes” or “it depends—here, read this 96-page publication.” Thus we have H&R Block.

So if you’re looking for a simple yes or no answer to the question posed in this article’s title, you’re going to be disappointed.

In the case of Social Security benefits, whether you owe tax depends on 1) the amount of your income, and 2) your filing status (e.g., single, head-of-household).

Quick & Dirty Test to Determine Whether Your Social Security Benefits Are Taxable

Did you earn income in 2013 other than Social Security benefits?

→ If no, in general you do not owe any tax on your benefits. In fact, you may not be required to file a federal tax return.

→ If yes, keep reading.

Add together:

  1. One-half of your 2013 Social Security benefits
  2. All of your 2013 non-Social Security income, including investment income and tax exempt interest

Now write the result on a piece of paper, memorize it, and eat the paper.

No, I’m kidding.

But seriously: Compare the sum you calculated above to the “base amount” for your filing status. Here are the base amounts:

  • $25,000 for single, head of household, qualifying widow or widower with a dependent child or married individuals filing separately who did not live with their spouse at any time during the year.
  • $32,000 for married couples filing jointly.
  • $0 for married persons filing separately who lived together at any time during the year.

If the base amount for your filing status is LESS than the sum of 1 and 2 above, you likely owe tax on your Social Security benefits.

If you’re an aural learner, here’s one of those nifty IRS explanatory videos.

What About You?

Did you receive Social Security benefits in 2013? Do you think you’ll owe tax?

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