Is My Social Security Income Taxable?
If your only source of income is your Social Security benefit, it will not be taxable. However, if you have other sources of income, such as private disability insurance benefits or interest or dividend income -- even if from non-taxable sources such as municipal bonds -- between fifty and eighty-five percent of your benefit could be taxable.
The IRS explains how to determine if your benefit is taxable with easy to use worksheets. See IRS Publication 915. You can obtain a copy by calling the IRS at 800.829.3676 or you can click here. (Social Security Retirement Income and Social Security Disability Insurance Income are taxed the same.)
Also consider lookin at our article: Getting Help Preparing Your Tax Return
- If you receive Workers Compensation payments, and they offset your disability benefits, the workers' compenstion payments may be treated as taxable income just like other Social Security Benefits.
- If you do have to payincome tax, you can have tax withheld from your benefits so you don't have to come up with money to pay a tax at year end.