Ask the Expert: If I keep working after I start collecting Social Security, will my taxes go up?

If I keep working even after I start collecting Social Security, will my taxes go up?

That’s very possible.

New York doesn’t tax Social Security benefits. But up to 85% of your benefit may be subject to federal income tax depending on your other income, such as income from work, retirement account distributions and investments. (A more upbeat way to look at it: At least 15% of your Social Security benefit will be tax-free, regardless of your other income.)

To determine how much, if any, of your benefit is taxable, Social Security looks at what it calls your “combined income.” That’s your adjusted gross income plus any tax-free interest income (from a municipal bond fund, for example), plus half your Social Security benefit.

If you’re a single taxpayer and your “combined income” is between $25,000 and $34,000, you may have to pay tax on up to 50% of your benefits. If your “combined income” is more than $34,000, up to 85% of your benefits may be taxable. If you’re married, filing jointly, and your combined income is between $32,000 and $44,000, up to 50% of your benefits might be subject to taxes. If your combined income is over $44,000, up to 85% of your benefits may be subject to taxes.

An example: Let’s say you’re married, filing jointly, and your gross 2022 Social Security benefits were $36,000. If you also had $55,000 of income in IRA distributions, consulting fees and tax-exempt interest, your “combined income” was $73,000 — $55,000 plus $18,000 (half your Social Security benefits). In that case, $30,600 of your benefits (85%) would be treated as taxable income.

The bottom line

Part of your Social Security benefit may be federally taxable if you also have earned income from work, investments, and distributions from retirement accounts.

More information

bit.ly/SSAretirementplannertaxes

bit.ly/IRSsocialsecurityrailroadbenefits