By Kimberly Lankford From Kiplinger’s Personal Finance
On the campaign trail last year, President Trump vowed that he would eliminate taxes on Social Security benefits, and it’s still one of several potential tax changes on the table. Here’s how taxes on Social Security benefits currently work, who has to pay them, steps you can take to reduce the taxes, and what you can do to bypass an unpleasant surprise at tax time.
How Benefits Are Taxed
Social Security benefits were not taxable for the first few decades of the program’s existence. But in 1983, up to 50 percent of benefits became taxable for single taxpayers whose “combined income”—also known as provisional income—was higher than $25,000 annually and for joint filers earning more than $32,000. Congress added another level of taxation in 1993, when up to 85 percent of Social Security benefits became taxable for single taxpayers earning more than $34,000 and joint filers earning more than $44,000.
