First, Are Social Security Benefits Taxable at All?

This is the most common question, and the answer is a classic: it depends. Your Social Security benefits are not automatically taxed. Whether you owe federal income tax on them, and how much, depends entirely on your total income from all sources.

The Internal Revenue Service (IRS) has a specific formula to figure this out. If your total income is below a certain level, you won’t have to pay any taxes on your benefits. If your income is over that level, a portion of your benefits—up to a maximum of 85 percent—will be considered taxable income. This taxable portion is then taxed at your regular income tax rate.

The key to this calculation is a figure called “provisional income,” which is sometimes also referred to as “combined income.” This isn’t a number you’ll find on any single form. Instead, it’s a special calculation you must do to see where you stand. We will walk through exactly how to calculate it in the next section.

It is also crucial to remember that this article focuses on federal income taxes. Your state may have entirely different rules. Some states do not tax Social Security benefits at all, while others do. We’ll touch on this later, but it’s an important distinction to keep in mind.