Understanding Social Security and Medicare Flipbook_2023

How Social Security Benefits Are Taxed If your income exceeds certain income thresholds, you may owe federal income tax on up to 50% or 85% of your Social Security benefits. The IRS uses your “combined income” to determine taxability of benefits. Combined income is defined as your adjusted gross income plus any tax-exempt interest (such as interest frommunicipal or savings bonds) plus 50% of your Social Security benefit. If you are married and file a separate tax return, you will probably pay taxes on all your Social Security benefits. In addition, some states may tax Social Security benefits, whereas other states may exempt them from taxation. About 40% of current beneficiaries pay taxes on their Social Security benefits. Source: Social Security Administration, 2022 Taxable portion of benefits 50% $25,000 to $34,000 $32,000 to $44,000 85% Over $34,000 Over $44,000 Married joint filer Single filer

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