Let’s be honest. Filing taxes with the IRS is not simple. Most of the time, you will need to recall previous events and seek supporting documentation, which, unless you are extremely detail-oriented, will take some time to process and may necessitate the assistance of a specialized accountant.
This sense of uncertainty and unease is heightened when discussing tax planning. Many Americans would lack a clear strategy, leaving them unsure of the taxes they could face.
The main example is the income tax on Social Security benefits. How many of you are 100% convinced that you must file a tax return with the IRS based on the money you receive from the Social Security Administration (SSA) each month? If you, like us, are unsure of the answer, read on.
How would the IRS define if you need to be taxed?
The answer is straightforward: the IRS indicates that you will undoubtedly have to pay some taxes. Since 1984, up to 50% of Social Security payments over a certain threshold have become taxable under President Ronald Reagan’s 1983 amendments to the Social Security Act.
The idea behind these metrics was based on the nature of revenue. As a worker, you will be required to pay a portion of your annual income in taxes. The same must be true for the Social Security benefits that will replace your salary when you retire. Later, in 1993, the taxable percentage of income was increased to 85%.
To determine if you are considered to have a filing status over your Social Security checks, the IRS requires you to take half of the benefits and add it to any other income you would have during the year.
If it exceeds any of the following thresholds, a portion of your Social Security benefits will be taxed.
It is critical to remember that if you believe a single payment is too burdensome on your cash flow, you can request that the IRS and SSA deduct a portion of your monthly payments so that your final tax bill is lower at the end of the fiscal year.
| Threshold | Detail |
| $25,000 | · If you are head of a household, single, or a qualifying surviving spouse.
· If you are married buy are filing separately and have lived apart from your spouse for the entire year. |
| $32,000 | If you are married and are filing jointly. |
| $0 | if you are married and plan to file separately but have lived with your spouse at any time during the fiscal year. |
To determine if you need to file a return, you would need to consider your marital status and your income:
| Marital Status and Age | Gross Income Threshold |
| Unmarried senior of 65 years old or older | More than $14,700 |
| Married senior of 65 years old or older filing jointly | More than $28,700 |
| Married seniors but only one of them is under 65 years | More than $27,300 |
To determine the maximum taxable amount of your Social Security benefits, consider the following combined income levels (Social Security benefits + other income):
| Type of Tax Filler | Income Threshold | Max % of Benefits Taxing |
| Single | $25,000 – $34,000 | 50% |
| Single | more than $34,000 | 85% |
| Joint | $32,000 – $44,000 | 50% |
Is it possible to file your report to the IRS even when you don’t need to?
Keeping track of IRS changes to income tax obligations is a smart habit. In addition, you may be eligible for a variety of tax credits, some of which can result in refunds, such as earned income tax credits or child tax credits.
Also See : New IRS tax brackets for 2025 – this is what you will have to pay from now on