Must I File a Tax Return for Social Security Income Under $25,000?

If you live entirely on Social Security, you rarely need to pay taxes or file a return. It's when you receive other income as well that your benefits can become prey for the taxman. Even if your benefits are well below $25,000, income from other sources may render them taxable and require you file a 1040.

The Tax Threshold

To find out if your benefits are taxable, you add up your adjusted gross income in the appropriate section of your 1040 form. Add any nontaxable interest you earned and then half your Social Security benefits for the year. As of 2012, if you file a joint return with income higher than $32,000, half your benefits are taxable income; above $44,000, it's 85 percent. For a single filer, the cut-off points are $25,000 and $34,000.


If you think there's a good chance of paying taxes next year, you can ask the government to withhold some of your benefits. Fill out a W-4V form for voluntary withholding and request the government take out 7, 10, 15 or 25 percent of your benefit. Alternatively you can make federal estimated tax payments -- used by self-employed professionals as a substitute for withholding -- every quarter. Either approach will save you from having to write a large check to the IRS next April.

Tax Strategy

Strategically lowering your other income can keep your Social Security check out of the IRS's hands. Postponing moves that result in a spike in income is another option. For example, if at the end of the year you're close to the $32,000 cut-off, delaying profitable asset sales from December until January may keep your Social Security tax free.

Reasons to File

Even if your combined income falls below the cut-off, you have to file if your non-Social Security money is high enough to require it. You may want to file even if you don't have to. If you had taxes withheld or paid estimated tax, for example, filing a 1040 is the only way to get your refund. If you qualify for an Earned Income Tax Credit or any other credit, you can't claim it unless you file.


About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.