Your Social Security Advisor

My Social Security Income Hurts When I File My Taxes – Ask Rusty

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Dear Rusty: I am getting hammered with taxes on my Social Security (SS). I am retired and draw a meager work pension and SS benefits. When my wife and I filed our joint tax return, we owed the IRS a substantial amount of money – they took 85% of my SS in taxes. We are just barely over the minimal amount of income allowed for SS tax exemption. Is there anything I can do so I do not have to pay all this money at once at the end of the year? I didn’t get any tax advice when I started drawing my SS, and the guy who prepared our tax return couldn’t have cared less. No one ever told me that I would get double-taxed on the SS that I worked so hard for. Any help or advice is appreciated; I cannot take another hit like this again. Signed: Double-Taxed

Dear Double-Taxed: Unfortunately, taxation of Social Security benefits has been law since 1983 when the law to allow 50% of benefits to be taxed was enacted. In 1993 they added another threshold to allow up to 85% of SS benefits to be taxable. Just to clarify the way it works (not that it will soften the pain), they don’t take 85% of your SS benefits away in taxes – but 85% of your SS benefits becomes part of your overall taxable income at whatever your normal IRS tax rate is for your income level. So, if your IRS tax rate is 10%, that percentage is applied to 85% of your SS benefits received during the tax year (at your income level).

As for whether there is anything you can do short of lowering your overall income, the answer is no. The IRS determines taxability of your SS benefits based upon something called your “Modified Adjusted Gross Income” or “MAGI,” which is your normal Adjusted Gross Income (AGI) from your tax return, plus 50% of the Social Security benefits you received during the tax year, with any non-taxable interest you may have had added back in. With an IRS filing status of “married-filing jointly,” if your MAGI was more than $32,000, then 50% of your SS benefits are included in your taxable income; if your MAGI is more than $44,000, then up to 85% of your SS benefits becomes part of your overall taxable income. And unfortunately, there’s no way around that. FYI, the thresholds for single filers are $25,000 (above which 50% of SS is taxable) and $34,000 (above which 85% of SS is taxable). Below those minimum thresholds for both single and married filers, Social Security benefits aren’t taxable.

To soften the income tax burden when you file your taxes each year, you may want to consider having taxes withheld from your SS benefit payments. That’s easy to do by submitting IRS form W-4V to your local Social Security office. Here’s a link at which you can download and print that form: You will see that you can choose to have any of the following percentages of your SS benefit withheld for Federal Income Tax purposes – 7%, 10%, 12%, or 22%. To find the mailing address for your local Social Security office, go to

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation, and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website ( or email us at [email protected].

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David Brown
1 year ago

Was this even a real question? Or is it just designed to showcase how ignorant people can be?

Jerry L Caruthers
1 year ago
Reply to  David Brown

If you have worked all your life and the only thing someone ever knew about Social Security (SS) is how much is taken out of their paycheck. Then yes, this is good advice to have for first time SS beneficiaries. The public needs to be educated and made aware of the taxable income threshold. Believe it or not there our illiterate people in the U. S. that do not know any better!     

1 year ago

Unfortunately many institutions have decided to not have a retirement program. So my years of work yield me no retirement benefits. I cant afford my medications because of high prices. Thats all I work for. Plus trying to keep my home. So you don’t have a great retirement unless you are well off. But as long as I can stay in my home I will alternate which meds I can afford that month, go to food banks and pray electric and other life maintenance costs even out.

1 year ago

I did not see mention of the availability to pay quarterly payments to to IRS. Although it doesn’t lessen the bite you pay, it makes the bite(s) easier than one big chomp. And knowing what your tax liability was from the first year will help you determine approx how much each bite you want to send then is. Same is true with state payments (at least here in CA). Of course this is predicated on your ability to self save the payment to send. If your not fiscally responsible enough then the suggested tax withholding route is the way to go. You can find out more by going to, estimated taxes. You can make these payments on line. HTH

Dan W.
1 year ago

As a person who will be receiving his first social security payment this year (and who files his own tax returns), I will be keeping a copy of this article as a reminder of what to look for when filing my 2021 federal income tax return next year.

1 year ago
Reply to  Dan W.

It’s real simple Dan. You just have to keep track of the two dollar thresholds mentioned in the article. Go over the stated amounts and your SS is automatically subject to the tax rate specified as outlined in the article. It really isn’t anything more than the government’s way of means testing SS recipients to claw back money, via taxation, from those that have any sort or income that totals above the threshold limits.

Honestly, everyone would be a lot better off, if the federal government had an opt-out option regarding SS when young people enter the workforce. Sure the SS program would implode sooner, but FDR and his buddies never really designed the program to be a true retirement vehicle. If it were, it would have been designed much differently. It was always primarily designed as a way to ensure a steady stream of revenue to buy the Treasury’s debt on a regular, predictable basis. A captive market so to speak. That is why the only thing SS puts its money into is ultra-low yielding Treasury bonds. People would have been much better off if they had the option of investing the same about of money as the amount of SS taxes taken out each pay period for their 35 to 40 year working careers into a either a low cost S&P index fund or an income fund where the dividends are automatically re-invested and compounded over that time frame.

Dan W.
1 year ago
Reply to  PaulE

I think you’re right. Accounting for these social security payments should be simple (not that the idea of double taxation on these payments has me doing handstands). Just one more worksheet for me to complete.

Now if I could just get the IRS to cough up my 2020 refund…..