Taxable Based on Income – Up to 85% of Social Security benefits may be taxed if combined income exceeds certain thresholds.
Income Thresholds – Single filers earning over $25,000 and married couples earning over $32,000 may owe taxes on benefits.
How It’s Calculated – The IRS uses a formula combining adjusted gross income (AGI), nontaxable interest, and half of Social Security benefits.
State Taxes Vary – Some states tax Social Security benefits, while others, like Florida and Texas, do not.
Ways to Reduce Taxes – Strategies like Roth IRA withdrawals, tax-efficient investments, and delaying benefits may lower tax burdens.