Did you know that the Social Security benefits you receive might be subject to income tax? If you earn provisional income that exceeds certain limits, you may need to pay income taxes on a portion of your Social Security benefits. Your provisional income is your adjusted gross income (AGI) plus 1) any tax-exempt interest, 2) any income earned from certain foreign sources, and 3) 50% of any Social Security benefits that you receive.

Married individuals filing jointly who earn between $32,000 and $44,000 may have to pay taxes on 50% of their Social Security benefits. If AGI exceeds $44,000, then 85% of benefits may be subject to taxation. Individual taxpayers (generally including married individuals who file separately) earning between $25,000 and $34,000 may have to pay taxes on 50% of Social Security benefits. If AGI exceeds $34,000, then 85% of benefits may be subject to taxation.

Keep in mind that you may choose to have federal taxes withheld from your Social Security benefits instead of paying tax quarterly. Consult your tax professional for more information.

CRN200802-2013519