While the COVID-19 economic crisis has been addressed in part by the provisions of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), taxpayers who receive Social Security payments should be aware that their benefits might be taxable. In the following article, Optima Tax Relief reviewsv what Social Security recipients need to know about their tax obligations.

If you are a taxpayer who is currently receiving Social Security benefits in the form of a monthly retirement income, disability benefits, or survivor benefits, you might have to pay federal income taxes on a portion of the payments you’ve received. However, these do not include supplemental security income payments, which are not taxable.

The amount that taxpayers are obligated to pay will depend upon filing status and overall income. To determine your tax obligation, you must add half of your total Social Security benefits to other income sources, including wages, pensions, capital gains, interest, and dividends.

  • Single taxpayers whose total income exceeds $25,000 might have to pay taxes on a portion of their Social Security benefits.
  • Married taxpayers filing jointly must add their combined income to half of their own Social Security and half of their spouse’s Social Security benefits. If their total exceeds $32,000, they might have to pay taxes on their Social Security benefits.

The amount of taxable Social Security will depend upon the total amount of income, including benefits. Fifty percent of Social Security benefits may be taxable under the following circumstances:

  • Income between $25,000 and $34,000 for single, filing single, head of household, widow, or widower.
  • Income between $25,000 and $34,000 for married filing separately living in a separate residence from spouse for the entirety of 2019.
  • Income between $32,000 and $44,000 for married filing jointly.

Eighty-five percent of Social Security benefits might be taxable under the following circumstances:

  • Income above $34,000 for single, filing single, head of household, widow, or widower.
  • Income above $34,000 for married filing separately living in a separate residence from spouse for the entirety of 2019.
  • Income above $44,000 for married filing jointly.
  • Married filing separately living with their spouse during the 2019 tax year.

To learn more about the tax status of your Social Security benefits, please visit the IRS’s Social Security benefits and Railroad Retirement Tier 1 benefits page.

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