Social Security claims that 40 percent of beneficiaries must pay taxes to the IRS. Therefore, many retirees and people on disability benefits will have to pay federal income taxes on their benefits.
Of course, if you have a low Social Security check and you do not have other earnings, you may not have to pay taxes to the IRS. Mainly, those American beneficiaries who have substantial income must file a tax return.
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For your information, substantial income means other wages or interest. And self-employment earnings, dividends, or any other taxable income you may have received in 2023.
WHO MUST PAY TAX ON SOCIAL SECURITY BENEFITS IN 2024?
Following the rules the IRS has set, you must file a tax return if single and your combined income is between $25,000 and $34,000. If you are in this situation, you may have to pay income tax on up to 50 percent of your benefits.
For those Social Security beneficiaries whose combined income is more than $34,000, 85% of their benefits may be taxable says SSA. Beneficiaries who are married and file separately will probably have to pay taxes too.
Joint filers whose combined income is between $32,000 and $44,000, may have to pay taxes on a maximum of 50% of their benefits. So, it is important to check your combined income to see if you must file or not.
HOW MUCH DO I HAVE TO PAY IF I FILE A JOINT TAX RETURN AND GET OVER $44,000?
Social Security states that joint filers whose combined income is over $44,000 may have to pay taxes on up to 85% of their benefits. SSA recommends using your annual Statement.
This Benefit Statement will show you the amount of benefits you received in 2023. Therefore, this Benefit Statement will be useful when completing your tax return.
Do not worry if you did not receive your Social Security Benefit Statement. It will be available on your my Social Security account online. Creating a my account is free and easy. Visit https://www.ssa.gov/myaccount/ for more information.