Chapter 34
Special Tax Rules for Senior Citizens
All of your Social Security benefits are tax free if your “provisional income,” explained in 34.3, is $25,000 or less if you are single, or $32,000 or less if you are married and file a joint return. No more than 50% of your benefits are subject to tax if you file a joint return and your provisional income is over $32,000 but no more than $44,000, or if you are single and your provisional income is over $25,000 but no more than $34,000. When provisional income exceeds $34,000 or $44,000 (depending on your filing status), more than 50%, but no more than 85%, of your benefits are subject to tax. If you are married and filing separately, and did not live apart for the whole year, you must apply the 85% rate without considering the base amounts. If you are married filing separately and you lived apart the entire year, are a head of household, or are a qualifying widow(er), use the $25,000 and $34,000 base amounts for single persons.
If you are receiving Social Security benefits but continue to earn wages or self-employed income, you must pay FICA taxes or self-employment tax on that income regardless of your age.
If you are on Medicare, be sure you understand the impact of adjusted gross income on your premiums (34.12).
34.1 Senior Citizens Get Certain Filing Breaks
34.2 Social Security Benefits Subject to Tax
34.3 Computing Taxable Social Security Benefits
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