Do I have to pay taxes on Social Security benefits? How much?

Many people on Social Security are concerned about whether or not their benefits are taxed. While most people will not be, there is an earnings threshold at which you may have to pay tax.

On their Social Security benefits, some people may have to pay federal income tax.

There is a combined income restriction, and people with a combined income of less than $25,000 ($32,000 for married couples) each year are exempt from paying taxes on their Social Security benefits.

Individuals and married couples earning more than this amount, on the other hand, will almost certainly have to pay tax.

The Social Security Administration may be able to tax 50% of your benefits if you have a joint income of between $25,000 and $34,000 per year ($32,000 to $44,000 for married couples).

Finally, if one earns more than $34,000 ($44,000 for married couples), one's Social Security benefits may be taxed up to 85%.

For calculating your total income and, as a result, whether you will have to pay taxes, there is a relatively straightforward equation.

Beneficiaries will get a benefit statement called Form SSA-1099 from the Social Security Administration (SSA) in January of each year.

This form summarizes the entire amount of Social Security benefits you received in the preceding calendar year. It will allow you to "finish your federal income tax return to determine whether your benefits are taxed."