What's Happening
12 minutes ago

Netflix Stock Near All-Time Highs: New Las Vegas Restaurant With Food Inspired By Stranger Things, Squid Game & More Could Diversify Revenue

benzingabenzinga.com
19 minutes ago

Gilead Sciences Shares Push Higher After Q4 Report: Here's Why

benzingabenzinga.com
31 minutes ago

Confluent Stock Surges On Q4 Earnings Beat, Total Revenue Up 23%

benzingabenzinga.com
37 minutes ago

Here's How Much $1000 Invested In Marathon Petroleum 5 Years Ago Would Be Worth Today

benzingabenzinga.com
37 minutes ago

Zillow Stock Slides After Q4 Earnings Miss Estimates: Details

benzingabenzinga.com
51 minutes ago

Booking Enters Historically Strong Trading Window Ahead Of Earnings

benzingabenzinga.com
54 minutes ago

Lyft Q4 Earnings: Revenue Beat, Gross Bookings Up 15%, New Buyback — 'Our Biggest Competition Is Inertia'

benzingabenzinga.com
58 minutes ago

DoorDash Shares Climb After Solid Q4 Results: Total Orders Grew 19%, GOV Increased 21%

benzingabenzinga.com
1 hour ago

Super Micro Reports Preliminary Q2 Earnings, Company Expects To File Delayed Reports In Coming Weeks

benzingabenzinga.com
1 hour ago

Robinhood Q4 Earnings Preview: Can Company Rebound From Q3 Miss? Key Items To Watch

benzingabenzinga.com
1 hour ago

$1000 Invested In United States Steel 5 Years Ago Would Be Worth This Much Today

benzingabenzinga.com
1 hour ago

Upstart Shares Soar After Solid Q4 Report, Strong Q1 Guidance

benzingabenzinga.com
1 hour ago

Interactive Strength Shares Are Trading Lower Today: What's Going On?

benzingabenzinga.com
2 hours ago

12 Consumer Discretionary Stocks Moving In Tuesday's Pre-Market Session

benzingabenzinga.com
2 hours ago

12 Health Care Stocks Moving In Tuesday's Pre-Market Session

benzingabenzinga.com
2 hours ago

12 Industrials Stocks Moving In Tuesday's Pre-Market Session

benzingabenzinga.com
2 hours ago

12 Information Technology Stocks Moving In Tuesday's Pre-Market Session

benzingabenzinga.com
2 hours ago

A Glimpse Into The Expert Outlook On Fluence Energy Through 12 Analysts

benzingabenzinga.com
2 hours ago

The Analyst Verdict: Praxis Precision Medicine In The Eyes Of 4 Experts

benzingabenzinga.com
2 hours ago

Analyst Expectations For Allstate's Future

benzingabenzinga.com

It’s Getting Harder and Harder to Hide from Social Security Benefit Taxes. How to Prepare If You’ll Owe Them in 2025.

The average Social Security benefit will reach $1,976 per month in January 2025. It could crack $2,000 per month for the first time as the year continues. While these larger checks are welcome, they’re not always enough for the retirees who depend on them.

Part of that has to do with inflation, which has hurt Social Security’s buying power. However, federal income taxes on seniors’ Social Security benefits play their part as well. Below, we’ll look at why and what to do if you expect to owe them in 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

Stressed couple looking at document together.

Image source: Getty Images.

How do Social Security benefit taxes work?

The federal government taxes the Social Security benefits of some retirees if their provisional income — their adjusted gross income (AGI), plus nontaxable interest from municipal bonds and half their annual Social Security benefits — exceeds certain thresholds for their marital status as shown in the table below:

Marital Status

0% of Benefits Taxable If Provisional Income Is Under:

Up to 50% of Benefits Taxable If Provisional Income Is Between:

Up to 85% of Benefits Taxable If Provisional Income Exceeds:

Single

$25,000

$25,000 and $34,000

$34,000

Married

$32,000

$32,000 and $44,000

$44,000

Source: Social Security Administration.

This doesn’t mean you could lose up to 85% of your benefits. It means you could pay ordinary income tax on up to that amount. But giving up any of your benefits can be difficult, especially if you don’t have a lot of personal savings.

These taxes used to be less common than they are now. Rising average benefits coupled with taxation thresholds that haven’t changed in three decades have forced more retirees to return a portion of their benefits to Uncle Sam every year.

Sometimes, it’s possible to avoid these taxes by reducing the amount you withdraw from your retirement accounts or relying more upon Roth savings. You’re usually allowed to withdraw these funds tax-free, so they don’t affect your AGI or provisional income. But this might not be feasible for everyone.

How to prepare for income taxes on Social Security benefits

If you don’t think you can avoid Social Security income taxes on your benefits, your next-best move is to prepare for them. It’s possible to set this money aside on your own and pay any amount due at tax time if you’d like. You may want to consult a tax professional to help you estimate how much you might owe.

Alternatively, you can ask the Social Security Administration to withhold a portion of your checks for taxes. You can do this by contacting the Social Security Administration over the phone or by visiting your local office. You can also download Form W-4 V from the IRS website and mail it to your local Social Security office.

Don’t forget about state income taxes on benefits

So far, we’ve only talked about federal Social Security benefit taxes, but a handful of states tax benefits as well. In 2025, you may have to worry about state benefit taxes if you live in one of the following places:

  • Colorado
  • Connecticut
  • Minnesota
  • Montana
  • New Mexico
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

However, not all retirees in these states owe taxes. Each has its own formula that determines who owes these taxes. Check with your state department of taxation or a local accountant to learn how much, if any, state Social Security benefit taxes you could owe in 2025.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

Related Posts

Image source: Getty Images The best credit cards have a lot of perks — cash back, travel rewards, purchase protection, and more. But what happens

Social Security benefits for spouses are a common source of confusion. MassMutual reports that 25% of surveyed adults near retirement age were unaware that spouses

Image source: Getty Images Most people pay their credit card bill once a month, but you’re allowed to pay more frequently. Technically you can pay

The latest cover of Time magazine shows Elon Musk sitting at the historic Resolute Desk in the Oval Office with the U.S. flag and the