| The answer to the question of whether or not your Social Security benefits are taxable is "it depends." If your only income was your Social Security or equivalent railroad retirement benefits, your benefits are most likely not taxable, and you probably are not even required to file a tax return. However, the benefits may be taxable to recipients who have other income if their adjusted gross income exceeds certain levels established by Congress. A maximum of 85 percent of your benefits may be subject to federal income tax.
In order to accurately calculate if and how much of your Social Security benefits are taxable, the Internal Revenue Service has provided a worksheet. But there is a relatively quick test to see if your benefits are taxable. You add one-half of your Social Security benefits to all of your other income, including tax-exempt interest and inclusions from income. This total is compared to a base amount, which is determined by your filing status. If your income calculation is less than the base amount, none of your benefits are taxable.
If you are married and file a joint tax return, you and your spouse are required to combine your incomes and Social Security benefits, along with any equivalent railroad retirement benefits, to calculate the portion of your benefits that must be included as income.
Taxable Social Security and railroad retirement payments are included in the income of the person who has the legal right to receive them, regardless of the person who actually received them.
In general, an individual is to include Social Security benefits in income for taxation purposes in the year for which the Social Security benefit checks are issued.
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