Video:How Social Security Benefits Are Taxedwith D. Craig Godfrey
Social security benefits can be taxable, and it's important to know what is taxable when filing. Here are some tips on how social security benefits are taxed.See Transcript
Transcript:How Social Security Benefits Are TaxedHey guys, Greyson Ferguson here with About.com. Today we are going to look at how social security benefits are taxed.
Social Security Benefits Above a Certain Amount Are TaxedIf you received social security benefits, they may be taxable to you. There is a calculation that's performed, or everyone should perform, where you take half of your social security benefits and add it to your total income, including municipal income.
If that totals more than $32,000 for a couple or $25,000 for a single individual, your social security benefit may be taxable. The taxable portion is going to be from 0-85 percent. That is not the tax rate. That is the amount of the benefits that is going to be taxable.
Social Security Benefits Taxed at Your Income Tax RateIt is then taxed at your income tax rate that is on the rest of your income. At about $44,000 at a joint return for a couple, that is where you are going to get to an 85 percent level. At that level, you can just about figure you are going to pay taxes on 85 percent of your social security benefits.
Well there you have it. I'd like to thank the folks at Godfrey Wise Berg, and to learn more, visit us on the web at About.com.