Social Security benefits can be taxable based on your combined income, as outlined by the IRS. Here are the critical income thresholds for the 2024 tax year:
- Single Filers: If your combined income exceeds $25,000, up to 50% of your benefits may be taxable.
- Married Couples Filing Jointly: For couples, the threshold is $32,000, where up to 50% of benefits may be taxable.
- Higher Income Limits: If your combined income goes above $34,000 (single) or $44,000 (married filing jointly), up to 85% of your benefits could be subject to tax.
How is Combined Income Calculated?
Your combined income is determined by adding your adjusted gross income (AGI), any nontaxable interest, and half of your Social Security benefits.
Tax Implications:
If your combined income is below the specified thresholds, your Social Security benefits will not be taxable. However, exceeding these limits means you may face federal income tax on a portion of your benefits.
Recent IRS Updates:
Taxpayers have been reminded of these potential taxes on Social Security benefits, making it vital for retirees to understand how these guidelines could affect their overall tax liability in 2024. Being informed can help you navigate your financial planning more effectively and avoid unexpected tax burdens.
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