Determining whether Social Security Income is taxable causes a lot of confusion. Beliefs regarding an answer are usually black and white. Most believe that Social Security income is never taxable. Well, this blogger's Mother told her at a young age, "the only sentence that should use the word never is this one". As we know, much in life is not black and white, and neither is the answer to this question.


To determine if Social Security income is taxable, start by noting the filer(s) filing status. Then, take:

1)   One-half of the Social Security benefits, plus

2)   All other income, including tax exempt interest.


When making this calculation, do not reduce other income by any exclusion for:

  • Interest from qualified US Savings Bonds
  • Employer-provided adoption benefits
  • Foreign earned income or foreign housing, or
  • Income earned in American Samoa or Puerto Rico by bona fide residents.


If the total is more than the base amount for the filing status, part of the benefits may be taxable. If married and filing joint, combine income and benefits. Even if the spouse did not receive benefits, add spouse's income to the taxpayer's income.


Base amounts for tax year 2010, by filing status are:


Single, Head of Household, or Qualified Widow(er):            $25,000


Married Filing Joint:                                                      $32,000


Married Filing Separate and lived apart from spouse

for all of the year:                       $25,000


Married Filing Separate and lived with spouse at

           any time during the year:                                           $0


Consult Publication 915 for additional information and as always, if you are still confused, make life simpler by consulting a tax professional. For the Liberty Tax Service® office closest to you, click here and enter your zip code at the top left of the page.


Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.