Many retirees are surprised to learn their Social Security benefits are taxable. With the right planning, you can significantly reduce — or even eliminate — this tax burden.
Are Your Social Security Benefits Taxable?
Yes — up to 85 percent of your Social Security benefits can be subject to federal income tax. However, many retirees pay little or no tax on their benefits because the IRS uses a special formula called combined income to determine how much is taxable. If your income is low enough, your benefits are completely tax-free.
What Is Combined Income?
The IRS calculates your combined income (also called provisional income) using this formula: Combined Income = Adjusted Gross Income + Nontaxable Interest + 50% of your Social Security Benefits. This combined income figure is then compared to specific thresholds to determine how much of your benefit is taxable.
2026 Federal Tax Thresholds for Single Filers
If your combined income is below $25,000, none of your Social Security benefits are taxable. If your combined income is between $25,000 and $34,000, up to 50 percent of your benefits may be taxable. If your combined income is above $34,000, up to 85 percent of your benefits may be taxable.
2026 Federal Tax Thresholds for Married Couples Filing Jointly
If your combined income is below $32,000, none of your Social Security benefits are taxable. If your combined income is between $32,000 and $44,000, up to 50 percent of your benefits may be taxable. If your combined income is above $44,000, up to 85 percent of your benefits may be taxable. These thresholds have not been adjusted for inflation since 1984, which means more retirees become subject to taxation each year.
A Practical Example
Suppose you are a single retiree with $20,000 in IRA withdrawals, $2,000 in dividend income, and $24,000 in Social Security benefits per year. Your combined income would be $20,000 plus $2,000 plus $12,000 (50 percent of $24,000) equals $34,000. This puts you exactly at the threshold where up to 85 percent of your benefits could be taxable.
Strategy 1 — Roth IRA Conversions Before Claiming
Converting traditional IRA funds to a Roth IRA before you begin collecting Social Security is one of the most powerful tax reduction strategies available. Roth withdrawals do not count toward combined income, which can keep your taxable benefits low for decades.
Strategy 2 — Manage IRA Withdrawals Carefully
Spreading IRA withdrawals across multiple years helps you stay below combined income thresholds. Take larger withdrawals in low-income years before Social Security begins, and smaller ones after benefits start.
Strategy 3 — Qualified Charitable Distributions
If you are age 70.5 or older, you can donate up to $105,000 directly from your IRA to a qualified charity. This satisfies your Required Minimum Distribution without adding to your taxable income or combined income — a double tax benefit.
Strategy 4 — Delay Claiming Social Security
The years between retirement and age 70 are ideal for Roth conversions and IRA withdrawals at low tax rates. Delaying Social Security during this period keeps your combined income lower while you convert at favorable rates, potentially saving thousands of dollars in lifetime taxes.
Do States Tax Social Security Benefits?
In addition to federal taxes, some states also tax Social Security benefits. As of 2026, states that tax Social Security to some degree include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Most other states exempt Social Security benefits from state income tax entirely.
Key Takeaways
Up to 85 percent of your Social Security benefits can be subject to federal income tax. Single filers with combined income below $25,000 pay no federal tax on benefits. Married filers with combined income below $32,000 pay no federal tax on benefits. Roth IRA conversions before claiming Social Security are one of the most effective tax reduction strategies. Consult a tax professional or financial advisor for personalized planning based on your specific situation.
⚠️ Disclaimer: This guide provides general information only and is not tax advice. Consult a qualified tax professional or CPA for advice specific to your situation.