Is a Social Security Check Taxable?

Social Security provided a monthly income to 57.6 million people in 2009, according to statistics from the Office of Retirement and Disability Policy. About one third of the recipients pay federal income taxes on part of the benefits. Taxing Social Security benefits has existed since 1983, with an increase in taxation in 1993. The Internal Revenue Service taxes retirement, survivors benefits and disability payments for anyone who meets the income threshold.

Combined Income Is the Standard Test

If you have income other than Social Security, you may owe federal income taxes. If Social Security is your only income, you will not owe taxes on your Social Security checks. The IRS uses combined income figures to determine who owes taxes on Social Security checks. Calculate your combined income by adding all of your reportable income or adjusted gross income to your nontaxable interest and 50 percent of your Social Security income for the year. This figure represents your “combined income” for calculating any taxes you owe.

Apply the Tables to Your Combined Income

If your combined income is more than $25,000, you may owe taxes on your Social Security check as a single filer. Married persons filing jointly owe taxes after $32,000. This tier of taxation stops at $34,000 for single filers and $44,000 for married filers, and taxes 50 percent of Social Security benefits. Combined income over $34,000 for single filers and $44,000 for married filers rates 85 percent of Social Security benefits taxed. The IRS does not tax more than 85 percent of Social Security benefits in 2010.

Read Your SSA-1099 Carefully

Each Jan. 31, Social Security sends a SSA-1099 with totals for benefits paid in the previous year. Box 1 has monthly check totals, but Box 3 includes lump-sum payments. The IRS taxes lump-sum payments for back pay for Social Security disability differently. See worksheets in Publication 915 or use tax software to calculate taxes on lump-sum payments. If you receive a substantial lump-sum payment, contact the IRS or your disability attorney for questions about federal income taxation.

Prepare for Taxation of Social Security Benefits

If you anticipate that the IRS may tax your Social Security benefits because you have other income or nontaxable interest, you can request withholding from your Social Security check. Form W-4V allows the taxpayer to choose the amount withheld: 7 percent, 10 percent, 15 percent or 25 percent. Complete the Form W-4V and drop it off at your nearest Social Security office. Social Security will withhold taxes from your Social Security check and report the total on your SSA-1099 in January.