Are Social Security benefits non-taxable in all situations?

Are Social Security benefits non-taxable in all situations?

  • December 30, 2022
  • David Greene
  • Comments Off on Are Social Security benefits non-taxable in all situations?

The answer is both “yes and “no.”  Here’s what I mean.  If your Social Security is truly your only income, it is not taxable.  This is true whether it is Social Security Disability or your entitlement based on your age.  However, if a taxpayer has a different source of income or has an unexpected income stream in a year, the Social Security benefits may be taxable.  For instance, he may have a part time job or win a lawsuit or, a very common one, may have a debt forgiven, because the amount forgiven becomes income to the debtor.  In these cases, a percentage of your Social Security benefits becomes taxable on a sliding scale, from 0% to 85% of your Social Security.  Therefore, earning a small amount of extra money may not impact your Social Security, but a large amount will result in taxation of your Social Security, up to 85%.  This will be taxed at your normal tax rate.

Tags: , , , , , , ,

Office Location

11 McGee Street
Greenville, SC 29601

Phone: (864) 271-7940
Fax: (864) 370-3413
Toll Free: 1-800-216-1116