Are Social Security Benefits Taxable?

A person who receives social security benefits may wonder if his benefits are taxable. The question is extremely important for senior citizens or disabled people whose only income comes from their disability or retirement benefits. If a person does not get any additional income from another source, the federal government does not expect him to pay any taxes on the benefits he receives. In part, this is because the benefits were already taxed ones. A person who has more than one form of income needs to consider his adjusted gross income.

What About the Adjusted Gross Income?

The amount a person can earn before he has to pay taxes on his social security income depends on how much he grosses. For a single person or a person filing as head as household, the gross amount he can earn before his social security benefits are taxable is $25,000. Married couples have a slightly higher rate. A married couple can earn $32,000 before the couple has to pay taxes on his social security. If he has more than one income, he still has to pay taxes on his base income, provided his base income is above $8000 for an employed person and $600 for a business.

How Can I Be Safe?

If a person has questions about taxes and his social security benefits, he should consult a tax professional. If a social security beneficiary cannot afford to consult a tax professional, many community action agencies offer tax help to residents of the community. Often the professionals are accountants or professionals who receive yearly training to keep up with the changes to the applicable tax laws. When in doubt, a person should just put all relevant information about his income sources on his income tax return. A good example of what not to do comes from country singer Willie Nelson.

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