What counts as combined income
The IRS uses a formula, not your total benefit amount, to decide how much gets taxed: your adjusted gross income (AGI), which is your total gross income minus certain above-the-line adjustments, plus any tax-exempt interest, plus half of your Social Security benefits for the year. Add those three together, and you get your combined income.
Combined income = AGI + tax-exempt interest + ½ Social Security benefits
Note: If married filing jointly, both your and your spouse’s income, adjustments, and Social Security benefits should be included in the calculation.
Combined income thresholds by filing status
| Filing status | 0% taxable | Up to 50% taxable | Up to 85% taxable |
|---|---|---|---|
| Single, head of household, or qualifying widow(er) | Under $25,000 | $25,000–$34,000 | Over $34,000 |
| Married filing jointly | Under $32,000 | $32,000–$44,000 | Over $44,000 |
| Married filing separately | If living apart all year: Under $25,000 | If living apart all year: $25,000–$34,000 | Lived with your spouse at any point: up to 85% taxable at any income. |
Source: Internal Revenue Service
You can also use the IRS Interactive Tax Assistant to check your personal tax situation and determine whether your Social Security is taxable.
Combined income calculation example
Say you’re single, receive $20,000 in Social Security benefits, and withdraw $22,000 from a traditional IRA.
- Half of your Social Security benefits: $20,000 ÷ 2 = $10,000
- Combined income: $22,000 (AGI) + $10,000 (half of Social Security benefits) = $32,000
Because your combined income is $32,000, it falls within the $25,000 to $34,000 range for single filers. That means up to 50% of your Social Security benefits may be taxable.
Why more retirees owe tax on their benefits every year
These thresholds haven’t changed since they were last expanded in 1993. Social Security benefits, meanwhile, get a cost-of-living adjustment most years. That means more retirees cross into taxable territory every year, even without any real change in their standard of living.
Special situations that can impact whether Social Security is taxable
- You earn tax-exempt interest: Interest from municipal bonds is generally exempt from federal income tax, but it still counts toward your combined income when determining whether your Social Security benefits are taxable.
- You’re 65 or older: If you’re 65 or older, the new $6,000 senior deduction can reduce your total taxable income, including that applicable to Social Security, although it phases out once your modified AGI passes $75,000 for single/head of household or $150,000 for joint filers.
- You want to avoid a tax bill at filing time: You can choose to have federal income tax withheld from your monthly Social Security benefits at 7%, 10%, 12%, or 22% by submitting Form W-4V to the Social Security Administration.
