When it comes to tax season with its barrage of mind-boggling forms and detailed calculations, getting your personal finances in order can be a daunting task, especially if you’re not completely sure of the rules.
For example, if you receive a Social Security benefit from the government, that money is subject to taxes. How much you have to pay depends on your income and whether you file a joint or individual return.
To walk you through the process, here’s a guide to the formula used by the IRS to determine how much you owe on your distributions:
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Is social security taxed?
Yes. Internal Revenue Service rules dictate that many who receive Social Security benefits must pay income tax on that money.
The amount you pay is determined by a calculation that involves what the IRS calls “combined income.”
Joint income is: Your adjusted gross income plus non-taxable interest plus half of your Social Security benefits.
Up to 85% of your 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 your 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 combined income between $32,000 and $44,000.
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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 Social Security Benefit Statement, or SSA-1099, and can be used to find out how much you owe when you file your federal tax return.
For all those receiving benefits, the SSA-1099 should be automatically emailed to you. If you don’t receive it, a printable version should be available online after you create a “my social security” account.
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This article originally appeared on USA TODAY: Is Social Security Taxable? Find out how the rates for 2023 are calculated