Taxes on Social Security Benefits

The IRS determines how much of your benefit is taxable based on your combined income, which is your Adjusted Gross Income plus any nontaxable interest plus half of your annual Social Security benefit. For single filers, if combined income falls between $25,000 and $34,000, up to 50% of benefits may be taxable. Above $34,000, up to 85% may be taxable. For married couples filing jointly, the thresholds are $32,000 to $44,000 for the 50% tier, and above $44,000 for the 85% tier. These thresholds have not been adjusted for inflation since the 1980s and early 1990s, which means a growing share of retirees pay tax on their benefits each year. Georgia does not tax Social Security benefits at the state level, which is a meaningful advantage for Moore Invested clients in the Atlanta area. Managing your combined income through smart account withdrawal sequencing, Roth conversions, and QCDs can reduce or eliminate the federal tax on your Social Security benefits.

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