What “combined income” means and how it’s calculated
The IRS doesn’t look at your Social Security benefit in isolation. It starts with your adjusted gross income (AGI), which is your total gross income minus specific above-the-line adjustments, and adds back five items, including:
- Nontaxable interest you earned (like municipal bond interest)
- Half of your annual Social Security benefit
- Adoption benefits (Form 8839)
- Foreign earned income or housing (Form 2555)
- Some income from residents of American Samoa or Puerto Rico
The total is your modified adjusted gross income.
MAGI = adjusted gross income + nontaxable interest + ½ your annual Social Security benefit
For example, say your AGI is $30,000, you earned $1,000 in tax-exempt interest, and you received $15,000 in Social Security benefits for the year. Half of $15,000 is $7,500, so your MAGI is:
$30,000 + $1,000 + $7,500 = $38,500
Federal thresholds for Social Security benefits by filing status
Use this table to determine what portion of your Social Security benefits (if any) are taxable:
| Filing status | Modified Adjusted Gross Income | Taxable portion of benefits |
|---|---|---|
| Single / head of household | Under $25,000 | None |
| Single / head of household | $25,000 – $34,000 | Up to 50% |
| Single / head of household | Over $34,000 | Up to 85% |
| Married filing jointly | Under $32,000 | None |
| Married filing jointly | $32,000 – $44,000 | Up to 50% |
| Married filing jointly | Over $44,000 | Up to 85% |
| Married filing separately (lived with spouse) | Any amount over $0 | Up to 85% |
Source: Internal Revenue Service
For example, let’s say you’re a single filer and have a combined income of $38,500. This falls above the $34,000 mark, so up to 85% of your benefits could be taxable.
You can use the IRS’s Interactive Tax Assistant to check if your Social Security benefits are taxable.
States that also tax Social Security benefits
Most states don’t tax Social Security benefits at all. Only eight states tax Social Security benefits, but many also offer exemptions or income-based deductions that shrink or eliminate the tax for many residents. Rules and exemption thresholds vary significantly by state and can change, so check your specific state’s current tax treatment rather than assuming your federal result tells the whole story.
Taxes on SSDI and SSI
- SSDI (Social Security Disability Insurance) follows the same combined-income rules described above, since it’s funded by the same payroll taxes as retirement and survivor benefits.
- SSI (Supplemental Security Income) is completely different—it’s a needs-based program, not funded by payroll taxes, and it’s never taxable no matter how much other income you have.
How to reduce or avoid taxes on your benefits
- Manage the timing of withdrawals: Spreading retirement account withdrawals across years, rather than taking a large lump sum in one year, can help keep your adjusted gross income below a taxation threshold.
- Consider Roth conversions before claiming benefits: Since qualified Roth withdrawals don’t count toward combined income, converting some traditional retirement savings before you start collecting Social Security can reduce your taxable income in retirement.
- Time other income carefully: Avoid taking large lump sums from bonuses, capital gains, or freelance work in a single tax year. Spreading this income out keeps your overall taxable income lower, minimizing how much of your Social Security benefit gets taxed.
- Have tax withheld directly: File Form W-4V (Voluntary Withholding Request) with the Social Security Administration to have 7%, 10%, 12%, or 22% of your monthly benefit withheld for taxes, so you’re not stuck with a large bill at filing time.
Use our Social Security calculator to estimate your monthly benefit before you start planning around how much of it might be taxable.
