Is Social Security Taxable? (Updated for 2025)

Is Social Security taxable? It is a question almost every retiree asks at some point. The answer is not a simple yes or no. It depends on how much other income you have coming in.

In this guide, I will walk you through exactly how Social Security taxes work in 2025. I will show you when your benefits might be taxed, how much could be taxed, and what you can do to keep more of your money.

If you are planning for retirement, understanding these tax rules can make a real difference in how much income you get to enjoy.

Quick Answer: Is Social Security Taxable?

In short, yes. Social Security can be taxable. Whether you owe depends on your overall income and how the IRS calculates your taxable Social Security benefits.

If your combined income from Social Security, retirement accounts, work, or investments is above certain limits, part of your benefits will be taxed. In some cases, up to 85% of your Social Security benefits could be counted as taxable income. If your income stays below those limits, your benefits might not be taxed at all.

The good news is there are clear rules and smart ways to reduce how much you owe. Let’s walk through how it works in 2025.

2025 Social Security Tax Chart

Here is a quick look at how much of your Social Security benefits could be taxable based on your income level:

*If you are married but lived apart from your spouse for the full year, you may be able to use the "Single" thresholds instead.

What Counts as Provisional Income?

It includes your adjusted gross income (AGI), not counting Social Security benefits, plus any tax-free interest you earned (like from municipal bonds), plus half of your Social Security benefits.

This total is what the IRS uses to figure out if and how much of your Social Security benefits will be taxed.

How to Calculate Your Taxable Social Security

It can sound complicated at first, but here is a simple step-by-step process you can follow:

• Step 1: Add up all your other income for the year, like IRA withdrawals, pension payments, wages, and tax-free interest.
• Step 2: Add 50% of your Social Security benefits to that number.
• Step 3: Compare your total provisional income to the chart above.

If your income is above the lower threshold, some of your benefits will be taxable. If it is above the higher threshold, up to 85% of your benefits could be taxed.

Example

Let's say you receive:

• $25,000 from Social Security
• $20,000 from IRA withdrawals
• $5,000 in tax-free municipal bond interest

Here is how you figure it:

$20,000 (IRA) + $5,000 (tax-free interest) + $12,500 (half of Social Security) = $37,500 provisional income

Since $37,500 falls between $32,000 and $44,000 for a married couple filing jointly, up to 50% of their Social Security benefits could be taxable.

How to Reduce Taxes on Social Security

If you are worried about losing part of your benefits to taxes, the good news is there are a few strategies that can help.

• ✅ Keep Your Income Below Key Thresholds:
  By managing how much taxable income you take each year, you may be able to stay in a lower bracket where less of your benefits are taxed.
• ✅ Do Roth Conversions Before Claiming Benefits:
  Converting part of a traditional IRA to a Roth IRA before you start Social Security can lower your future taxable income. Since Roth withdrawals are tax-free, they will not add to your provisional income.
• ✅ Use Tax-Free or Low-Tax Income Sources:
  Withdrawals from Roth IRAs, distributions from Health Savings Accounts (HSAs), some life insurance loans, and principal withdrawals from taxable accounts can help avoid pushing more of your Social Security benefits into the taxable range.

Common Mistakes Retirees Make

Even with the best plans, it is easy to slip into mistakes that could increase the taxes you pay on Social Security. Here are a few common pitfalls to watch for:

• ❗ Overdrawing from Retirement Accounts:
  Taking large withdrawals from your IRA or 401(k) in the same year you start Social Security can push you into a higher tax bracket and cause more of your benefits to become taxable. Managing the size and timing of your withdrawals can help you avoid this surprise.
• ❗ Not Planning Roth Conversions Early Enough:
  If you wait too long to convert to a Roth IRA, you might miss the best window for reducing your future taxable income.
• ❗ Ignoring Investment Income:
  Dividends, capital gains, and even tax-free bond income can all affect your provisional income. Many retirees are surprised when what seemed like small investment earnings cause a bigger tax bill on their Social Security.

Need Help Planning a Tax-Smart Retirement?

Planning your income carefully is one of the smartest ways to keep more of your Social Security benefits. At Carroll Advisory Group, we help retirees build personalized strategies that simplify taxes and support a confident retirement.

If you want help creating a tax-smart withdrawal plan, we would love to hear from you.
Schedule a conversation with us today and start building a retirement you can enjoy without unnecessary tax surprises.