If you make over a certain amount your social security is taxed how do they determine the percentage taxed?

Answer 1

If you are a Single filer or Married Filing Separately and you did not live with your spouse, if one half of your Social Security plus all other income that appears on you return exceed 25,000.00 then a portion of your Social security will be tax able.



If you are Married Filing Jiontly, if one half of your Social Securtiy plus all other income that appears on your return exceeds 32,000.00, then a portion of your Social Security will be taxable

If you were Married Filing Separately and lived with your spouse even one day of the Tax year, You will have a taxable portion of your Social Security.

In all scenerio's the maximum amount of your benefits that can be taxed is 85%, complete the worksheet in Pub 915.

Publication 915
http://www.irs.gov/publications/p915/index.html

Answer 2

It's a fairly complicated formula - basically, the more other income you have, the more of your social security is taxed, up to a maximum of 85% of it. If half of your social security plus all of your other income is less than $25,000 if you're single, or $32,000 if you're married filing a joint return, none of it is taxable.

The instructions for form 1040 has a worksheet to calculate the taxable amount of benefits - it's on page 28. You can download the instructions at irs.gov, or pick up a copy of the booklet at your local post office or library.

Answer 3

Right from the horse's mouth. Notice that IRA contributions lower the percentage. Cool, huh?