Do I need to file a tax return if my only income is Social Security?

Social Security Income (SSI) is considered taxable income. But there are a few exceptions that could mean more money in your wallet.

Certified Financial Coach and Tax Professional Jerry Zeigler shares his expert knowledge and tips in this quick and simple SSI tax guide.

1) How much of my Social Security income is taxable?

For purposes of this discussion, we’re talking about social security payments that get reported to you and the IRS on a tax form SSA-1099. These are Social Security retirement income, survivor benefits, and Social Security Disability Insurance (SSDI) payments.

The good news is that 15% of your social security payments are never taxable.

But what about the other 85 percent?

Let’s start with the federal tax return.

If half of your social security income, plus any other taxable income (plus tax-exempt interest), is below the “base amount,” none of your social security is taxed. So NO taxes on social security if you’re below the base amount (using the previous calculation) listed for your filing status:

• $25,000 if you’re single, head of household, or qualifying widow(er),
• $25,000 if you’re married filing separately and lived apart from your spouse for the entire year,
• $32,000 if you’re married filing jointly,
• $0 if you’re married filing separately and lived with your spouse at any time during the tax year.

If single (or head of household, or qualifying widow(er), etc.) and half your Social Security payments plus your other income is between $25,000 and $32,000, up to 50% of your Social Security is taxable. If the total is greater than $32,000, up to 85% of your Social Security is taxable. 

If filing jointly and your total is between $32,000 and $44,000, up to 50% of your Social Security is taxable. If the total is greater than $44,000, up to 85% of your Social Security is taxable. 

2) Why is it “up to” for greater than $25,000 or $32,000? 

There is a calculation to determine the exact amount that’s taxable above those base amounts. 

You can find the exact amount of Social Security that’s taxable by using the IRS’s Interactive Tax Assistant, but that doesn’t indicate whether or not you have to file a tax return, nor does it tell you what you may owe in taxes. You can determine what you may owe in taxes by using an online estimator or by filing a tax return. 

3) So I have to file a tax return if I am above the $25,000 or the $32,000?

Not always. You also need to check to see if you’re above the filing thresholds, which you can find annually on the IRS website.

4) Should I file a tax return even if it‘s not required?

If you could get a benefit by filing a tax return, you should consider filing a tax return even when not legally required to do so. For example, if you had some tax withholding, you may want to file a tax return to get those benefits back. If you’re in a position where you have no filing requirement each year, it may be wise to set all tax withholding to zero. 

Another time to file when not legally obligated to is if you’re required to file your state return, and you want to file it electronically. Sometimes, state tax returns will not be processed electronically if a federal tax return is not processed first. 

5) Do I need to file a state tax return?

Some states tax Social Security, and some states don’t. Each state has different filing requirements and income thresholds for filing tax returns. So each state has to be looked at on a case-by-case basis. 

You should consult or research your state’s applicable department – usually a Department of Revenue or a Department of Taxation. Just like for a federal tax return, there may be a benefit to filing a state tax return even if you’re not legally required to file. 

Hopefully, this article gives you valuable information concerning social security and taxes. If you still need help with your tax situation and would like free help, consider getting help from the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs.