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

Published 12:51 am Sunday, August 15, 2021

Getting your Trinity Audio player ready...
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