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Long IslandLI Life

Ask the Expert: Are Social Security benefits taxable?

If you are over 70 and have no income other than Social Security, is it still necessary to file income tax returns?

Not in most cases.

New York doesn’t tax Social Security. You don’t need to file a federal return if you’re single and over 65 and your 2017 gross income was under $11,950, or married filing jointly, both over 65 and your 2017 gross income was under $23,300 — and your Social Security benefit isn’t included in those amounts unless you had other income.

If your benefit is your only income, for tax purposes your gross income is zero. (One exception: if you’re married, file separately, and lived with your spouse at any time during the year, 85 percent of your benefit is taxable.)

If you have other income, a mathematical calculation determines how much, if any, of your Social Security is taxable. The Internal Revenue Service provides an interactive calculator to figure this out for you. (See ‘More information’ below.) But here’s the basic formula:

Add half your 2017 Social Security benefit to all your other 2017 income, including tax-exempt income. None of your benefit is taxable unless the total exceeds $25,000 (individual taxpayers) or $32,000 (married filing jointly). For example, let’s say you’re single and your 2017 Social Security benefit was $18,000. You also received $15,000 in pension benefits, IRA distributions, and tax-exempt interest. You’d add $9,000 (half your Social Security benefit) and $15,000. The total is $24,000; so none of your Social Security is taxable.

One asterisk: People must file a tax return to get a tax refund — so if you’re entitled to a refund for taxes that were withheld, you should file a return even if you owe nothing.

THE BOTTOM LINE

If Social Security is your only income, in most cases it’s not taxable.

MORE INFORMATION

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