Receiving Social Security benefits after years of work can feel like a well-deserved reward, but for many retirees, these payments are more than just a benefit—they’re essential to covering basic living expenses. While Social Security income is protected in many ways, it’s not completely immune from things like taxes, which can catch some seniors off guard.
Whether or not you need to file a tax return while collecting Social Security largely depends on your total income, not just your benefit amount. If Social Security is your only source of income, you may not need to file at all. But if you also earn money from a part-time job, pension, investments, or retirement accounts, your benefits could be taxable. The IRS uses a formula called “combined income” to decide how much—if any—of your Social Security is taxable.
Failing to pay taxes when required can lead to penalties, interest charges, and even partial garnishment of your benefits. The IRS can take up to 15% of your Social Security payments if you have unpaid tax debt. That’s why understanding these rules and staying compliant is key. Filing your taxes may even help you get a refund if you had too much withheld or qualify for certain tax credits.
Understanding Taxes on Social Security Benefits
The answer depends on your total income, not just your Social Security check.
- If Social Security is your only income, chances are you don’t need to file a tax return.
- For 2024, the IRS sets these income thresholds:
- Single taxpayers age 65 or older: No need to file if your gross income is less than $16,550.
- Married couples filing jointly, both 65 or older: Threshold is $32,300.
However, if you have any additional income—like a pension, 401(k) withdrawals, part-time work, or investment earnings—things change. You may need to file based on your combined income.
What is combined income?
Combined income is calculated as:
Adjusted Gross Income (AGI) + Nontaxable Interest + 50% of your Social Security benefits
When Are Social Security Benefits Taxable?
Your Social Security benefits become taxable only if your combined income passes certain limits:
| Filing Status | Combined Income Range | Taxable Portion of Benefits |
|---|---|---|
| Single | $25,000 – $34,000 | Up to 50% |
| Single | Over $34,000 | Up to 85% |
| Married Filing Jointly | $32,000 – $44,000 | Up to 50% |
| Married Filing Jointly | Over $44,000 | Up to 85% |
| Married Filing Separately | Any amount (if living together) | Up to 85% |
If your combined income is below these thresholds, your Social Security income remains tax-free.
Should You File Even If You’re Not Required To?
Yes, in some cases.
- If taxes were withheld from any other income, filing could help you get a refund.
- If you qualify for refundable tax credits (like the Earned Income Tax Credit or American Opportunity Credit), filing might put money back in your pocket.
What Happens If You Don’t Pay Taxes on Taxable Social Security Income?
If you’re supposed to pay taxes and don’t, the IRS will eventually contact you—and the consequences can grow quickly:
- Interest begins accruing from the due date, even if you got a filing extension.
- A failure-to-file penalty adds 5% per month (up to 25%) of what you owe.
- If ignored long enough, the IRS can garnish up to 15% of your Social Security benefits through the Federal Payment Levy Program.
While they won’t take your entire benefit, losing a portion every month can seriously impact your retirement budget.
Tips to Stay on Top of Taxes in Retirement
- Track all income sources throughout the year—not just Social Security.
- If needed, adjust withholding from other income or make quarterly estimated payments.
- Use tax software or consult a qualified tax professional to avoid surprises.
- Don’t ignore IRS notices—they won’t go away on their own and delay can cost more.
You may not need to file taxes if Social Security is your only income, but once you start earning from other sources, the rules change. Be aware of the income thresholds and keep an eye on your combined income. Filing a return might not just be a legal requirement—it could also be financially beneficial. When in doubt, speak to a tax expert to ensure you’re in the clear and not leaving money on the table.
