Tax Tips: Are Social Security benefits taxable?
The taxability of social security benefits depends upon your income and your marital status. If social security was your only source of income, you probably will not have to pay taxes on it.
However, if you have income from other sources, you may end up paying income taxes on part (or all) of your social security benefits. The easiest way to figure whether or not your benefits will be taxable is to add one-half of your social security benefits to your total other income. If the total of this calculation exceeds $25,000 for single individuals or $32,000 for married couples filing jointly, some or all of your benefits will be taxable.
Even if you have no taxable social security benefits for 2007, you may still want to file a tax return for 2007. In order to receive a check under the new economic stimulus package, you will need to file the 2007 return to show that you had at least $3,000 in qualifying income. Social security income does qualify under the package.
More information on the taxability of social security benefits can be found in IRS Publication 915.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
