The Internal Revenue Service considers Social Security payments taxable when a benefit recipient's combined income from Social Security and other sources exceeds a certain threshold. Couples who file a joint return are allowed to earn more income before taxation when compared to those who file a single return or choose married filing jointly as a taxpayer status.
The IRS relies on a combined income calculation to determine whether Social Security income is taxable. The calculation adds the taxpayer's adjusted gross income, taxable interest and half of the total Social Security benefits received to determine the total combined income of an individual or couple.
Individual Tax Filers
Social Security recipients filing as single must earn less than $25,000 in a tax filing year to avoid paying income tax on the Social Security payments. After that threshold is reached, a portion of the Social Security benefit is taxed instead of the entire amount. A recipient earning between $25,000 and $34,000 pays taxes on up to 50 percent of the benefits received during the year. A recipient earning more than $34,000 must pay tax on a maximum of 85 percent of the benefits received. Whatever the individual's combined income, 85 percent is the maximum portion of benefits subject to taxation.
Married Filing Jointly Filers
Social Security recipients married and filing jointly are allowed to earn -- in the aggregate -- a higher amount of combined income. Earnings of less than $32,000 are not taxed while earnings between $32,000 and $44,000 are taxed at up to 50 percent. Up to 85 percent of the Social Security benefits paid to couples with combined earnings of greater than $44,000 are subject to taxation. Like the benefits of single tax filers, 85 percent is the maximum portion of payments subject to tax.
Taxpayers with a known combined income that qualifies for taxation may opt to prepay a portion of the income tax through Social Security benefit withholding. IRS Form W-4V, Voluntary Withholding Request, allows a benefit recipient to specify a percentage of benefits to be withheld. Taxpayers may have 7 percent, 10 percent, 15 percent or 25 percent of benefits withheld. Form W4-V also allows a benefit recipient to stop withholding when a personal earnings situation changes.
Married and Filing Separately
The Social Security Administration provides no specific numbers concerning taxpayers who are married and filing separately. The agency's benefits planner asserts only that if you "are married and file a separate tax return, you probably will pay taxes on your benefits."
Ashley Mott has 12 years of small business management experience and a BSBA in accounting from Columbia. She is a full-time government and public safety reporter for Gannett.