With millions of tax returns already processed, the IRS reminds everyone that filing isn’t mandatory for anyone. While receiving Social Security may exempt some individuals, it’s not the sole determining factor. Age, marital status, and additional income sources all play a role in filing requirements.
Even if filing isn’t required, it’s still a smart move for many retirees. Refundable tax credits and potential income tax returns are just a few reasons. To determine your filing status, consult the IRS or a tax professional. Additionally, keep your Cost-of-Living Adjustment (COLA) letter from last year, as it might be helpful when filing.
Should I File Taxes if I’m a Social Security Recipient?
Your Social Security benefits might be subject to taxation if the total of one-half of your Social Security benefits and all other sources of income exceeds the base amount applicable to your filing status, which is used to determine tax liability.
For single filers, $25,000 is the cap for a head of household or a qualifying surviving spouse, the same amount for married people filing separately who lived apart from their spouse in the year 2023. The base amount is $32,000 for couples filing jointly, and $0 for married people filing separately who lived together with their spouse.
For the 2024 tax year, it is necessary to file a return under the following circumstances: if you are an unmarried individual aged 65 or older with a gross income surpassing $14,700; if you are submitting a joint return with a spouse, both of whom are 65 or older, and your combined gross income exceeds $28,700; or if you are filing a joint return with a spouse under 65 years old, and your total gross income exceeds $27,300.
Other Factors for Social Security Retirees to Consider
Understanding the taxability of your Social Security benefits involves considering your combined income, which is the sum of your adjusted gross income, nontaxable interest, and half of your Social Security benefits.
For single tax filers, if your combined income falls between $25,000 and $34,000, the Social Security Administration (SSA) indicates that you might be required to pay income tax on up to 50% of your benefits. Should your combined income exceed $34,000, the potential income tax on your benefits could extend to 85%.
Similarly, for joint tax filers, if your combined income ranges from $32,000 to $44,000, you may be subject to income tax on up to 50% of your benefits. Crossing the threshold of $44,000 in combined income may result in potential taxation on 85% of your benefits.
In cases of married filing separately, without cohabitation with your spouse in the previous year, your Social Security benefits are taxed as if you were a single filer. If you choose to file married separately while residing with your spouse, it is likely that you will incur taxes on your Social Security benefits.