Taxable Social Security

People frequently ask, "Is my Social Security income taxable?" The simple answer is, "It might be, but it depends on your income from all sources." Accurate? Yes. Informative? Not really.

To give some visual context (and dollar amounts) to those words, the following graph was developed to identify base amounts which are not taxable, and then show increasing income with the diagonal line. As the Combined Income rises above the base line, the amount ABOVE the base line is taxable income.

  • If a client asks how much of their SS income is taxed, refer him/her to Form 1040, line 5a (Social security benefits) and Line 5b (Taxable amount).

  • If a client asks to see how the computation was made to determine the Taxable amount, there is a worksheet in the printed tax return.