Do we have to pay taxes on SS payments ?

[D.B. Cooper]

This comes as a shock but turns out Social Security benefits payments are taxable. According to a recent NYTimes article.
As they say, “read it and weep”.

Archived version

 

[D.B. Cooper]

I'm revising my post since the NYTimes article only applies to citizens living in the US.
US citizens living abroad should check out IRS Publication 54.

 

[retiredbanker]

I'm not a CPA but to calm most readers here down, will say if SS is your only source of income and doesn't exceed $25,000 annually, your tax liability in the US is ZERO.

 

[Aztangogirl]

I'm not a CPA but to calm most readers here down, will say if SS is your only source of income and doesn't exceed $25,000 annually, your tax liability in the US is ZERO.

Exactly what my tax accountant in the US told me.

 

[jantango]

My social security benefits are below the poverty line, so I'm safe.

 

[Wade K.]

I'm not a CPA but to calm most readers here down, will say if SS is your only source of income and doesn't exceed $25,000 annually, your tax liability in the US is ZERO.

I believe it's half your Social Security plus any other income equals your provisional income. If you are single or married filing separately you'll pay income tax on 50% of your Social Security if your provisional income is more than $25k but less than $34k. If it's above $34k you pay taxes on 85% of your Social Security. Married couples filing jointly have higher thresholds.

This formula was developed back in I think it was 1983. At the time the income amounts were considered high for a retiree. They have never adjusted the rates for inflation so the end result is more and more people every year are ensnared into paying taxes on SS.