I’ll be straight with you: retirement doesn’t mean you’re done with the IRS. In fact, if you’re collecting Social Security in 2026, there’s a decent chance you’ll need to pay taxes on those benefits—and an even better chance you should file a tax return anyway, even if you’re not required to.
Confusing? Absolutely. But stick with me, because understanding this could save you thousands of dollars or help you get money back that you didn’t even know you were owed.
In January 2026, the Social Security Administration delivered benefit payments to more than 75 million Americans, totaling roughly $140 billion. A significant portion of those recipients will owe federal taxes on their benefits, and many don’t realize it until they get a nasty surprise from the IRS.
Let me walk you through exactly how to figure out if you’re one of them—and more importantly, what to do about it.
The Quick Answer (That Leads to More Questions)
Here’s the frustrating truth: whether you pay taxes on Social Security depends on your total income, your filing status, and a formula that seems designed to confuse people.
Some retirees pay zero taxes on their benefits. Others pay taxes on up to 85% of what they receive. The difference often comes down to a few thousand dollars in additional income.
The system has been this way since 1984, when Congress decided that higher-income Social Security recipients should pay federal taxes on their benefits. The thresholds they set back then? They’ve never been adjusted for inflation, which means more people get caught in the tax net every single year.
Let’s figure out where you stand.
The Formula That Determines Everything
The IRS uses something called your “combined income” to determine if your Social Security benefits are taxable. Here’s how you calculate it:
Your Combined Income =
- Your adjusted gross income (all your income minus certain deductions)
- PLUS any nontaxable interest (like from municipal bonds)
- PLUS 50% of your Social Security benefits
Once you know your combined income, you compare it to threshold amounts based on your filing status.
The Thresholds That Matter in 2026
If You’re Single, Head of Household, or Qualifying Surviving Spouse:
- Combined income between $25,000 and $34,000: Up to 50% of your benefits may be taxable
- Combined income over $34,000: Up to 85% of your benefits may be taxable
- Combined income under $25,000: Your benefits are not taxable
If You’re Married Filing Jointly:
- Combined income between $32,000 and $44,000: Up to 50% of your benefits may be taxable
- Combined income over $44,000: Up to 85% of your benefits may be taxable
- Combined income under $32,000: Your benefits are not taxable
If You’re Married Filing Separately:
Here’s where it gets weird. If you lived apart from your spouse for the entire year, you’re treated like a single filer (use the $25,000 and $34,000 thresholds).
But if you lived with your spouse at any point during 2026, your threshold is $0. That’s right—zero. Essentially, if you’re married, lived together, and filed separately, your Social Security benefits are almost certainly taxable. The IRS really doesn’t want married couples filing separately.
Let Me Walk You Through a Real Example
Let’s say you’re single and retired. In 2026, you received:
- $24,000 in Social Security benefits
- $15,000 from a part-time consulting job
- $2,000 in interest from a savings account
Here’s your calculation:
Step 1: Calculate 50% of your Social Security benefits
- 50% of $24,000 = $12,000
Step 2: Add your other income
- $12,000 + $15,000 (wages) + $2,000 (interest) = $29,000
Step 3: Compare to your threshold
- Your combined income is $29,000
- The threshold for single filers is $25,000
- You’re $4,000 over the threshold
The Result: Up to 50% of your Social Security benefits ($12,000) may be taxable. The exact amount depends on the IRS formula, but you’ll definitely owe taxes on some portion of your benefits.
The Income Sources That Count Against You
When calculating whether your Social Security is taxable, you need to include ALL your income sources:
Counted Income:
- Wages from any job (even part-time work)
- Self-employment income
- Interest and dividends (including from savings accounts, CDs, and investments)
- Capital gains
- Pension and retirement account distributions (401k, IRA, etc.)
- Rental income
- Unemployment benefits
Not Counted:
- Roth IRA distributions (the qualified ones)
- Life insurance proceeds
- Gifts and inheritances
- Certain veterans’ benefits
This is where a lot of people get tripped up. That $5,000 you withdrew from your traditional IRA to fix your roof? That counts. The dividends from your investment account? Those count too. Even tax-exempt municipal bond interest counts toward your combined income calculation.
Do You Actually Need to File a Tax Return?
Even if your Social Security benefits are taxable, you might not be required to file a return if your total income is below certain thresholds.
You Must File a 2026 Tax Return If:
- You’re single or head of household, at least 65 years old, and your gross income exceeds $15,700
- You’re married filing jointly, both spouses 65 or older, and your gross income exceeds $30,700
- You’re married filing jointly, one spouse under 65, and your gross income exceeds $29,200
These numbers are slightly higher than 2025 due to inflation adjustments.
But here’s the critical part: just because you’re not required to file doesn’t mean you shouldn’t file.
Why You Should File Even If You Don’t Have To
This is where people leave serious money on the table every year.
Reason #1: You Might Get a Refund
If you had federal taxes withheld from your Social Security payments or made estimated tax payments, you could be entitled to a refund. The only way to get that money back is to file a return.
You can have taxes withheld from your Social Security benefits by completing Form W-4V with the Social Security Administration. Many retirees do this to avoid a big tax bill in April, but they sometimes overwithhold and then don’t file to get their money back.
Reason #2: Refundable Tax Credits
Several tax credits are “refundable,” meaning you can receive money even if you don’t owe any taxes. The big ones for 2026:
- Earned Income Tax Credit (EITC): If you had any earned income (wages, self-employment), you might qualify for this credit, which can be worth several thousand dollars. Yes, retirees can qualify if they’re still working part-time.
- Child Tax Credit: If you’re supporting dependent children or grandchildren, you may qualify for this credit—and a portion of it is refundable.
- Child and Dependent Care Credit: If you paid for care for a dependent while you worked, this credit could apply to you.
I know a woman who didn’t file for three years because she thought she didn’t need to. When she finally filed, she got back nearly $4,000 in refundable credits she didn’t even know existed. Don’t be that person.
Reason #3: Premium Tax Credit Reconciliation
If you’re under 65 and receiving Social Security while also getting subsidies for marketplace health insurance, you need to file to reconcile your Premium Tax Credit. Not filing could mean problems with your health coverage next year.
How to Find Out How Much You Received in 2026
By the end of January 2027 (when you’re filing your 2026 taxes), the Social Security Administration will send you Form SSA-1099. This form shows exactly how much you received in Social Security benefits during 2026.
If you don’t receive it in the mail, don’t panic. You can access it anytime through your online My Social Security account at ssa.gov. I highly recommend setting up an account if you haven’t already—it makes tracking your benefits much easier.
The Withholding Strategy
If you know you’re going to owe taxes on your Social Security benefits, you have two options:
Option 1: Have Taxes Withheld from Your Benefits
Complete Form W-4V and submit it to the Social Security Administration. You can choose to have 7%, 10%, 12%, or 22% of your benefits withheld for federal taxes.
This is my preferred approach for most people because it spreads the tax payment throughout the year instead of hitting you with a large bill in April.
Option 2: Make Quarterly Estimated Tax Payments
If you don’t want withholding from your Social Security checks, you can make quarterly estimated tax payments to the IRS using Form 1040-ES.
This gives you more control but requires more discipline. You need to remember to make payments by April 15, June 15, September 15, and January 15.
The State Tax Question
Everything I’ve discussed so far is about federal taxes. But 38 states don’t tax Social Security benefits at all in 2026.
States That Do Tax Social Security (at least partially):
- Colorado
- Connecticut
- Kansas
- Minnesota
- Missouri
- Montana
- Nebraska
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia
If you live in one of these states, check your state’s specific rules. Many offer exemptions or deductions based on income or age.
Common Mistakes That Cost People Money
After helping people navigate this for years, I’ve seen the same mistakes repeatedly:
Mistake #1: Assuming Social Security is Never Taxable
Some people grew up hearing that Social Security benefits are tax-free. That hasn’t been true since 1984 for higher-income recipients.
Mistake #2: Not Accounting for One-Time Income
You sell a rental property or take a large IRA distribution in 2026? That one-time income bump could push you over the threshold and make your Social Security benefits taxable for that year—even if they normally wouldn’t be.
Mistake #3: Married Couples Filing Separately Without Understanding the Consequences
Unless you truly lived apart for the entire year, filing separately when you’re married usually creates more tax problems than it solves.
Mistake #4: Not Filing When They Should
The biggest mistake? Not filing a return when you could get money back through refunds or credits.
How to Report Your Social Security Benefits
When you file your 2026 tax return (due April 15, 2027), you’ll report your Social Security benefits on your Form 1040 or 1040-SR.
The taxable portion goes on line 6b. The IRS provides a worksheet in the instructions to help you calculate the exact taxable amount, or tax software will do it automatically.
If this sounds complicated, you’re not alone in thinking so. The Social Security taxation formula is genuinely confusing, and there’s no shame in getting help from a tax professional, especially for your first year navigating it.
Planning Strategies to Minimize Taxes
If you haven’t started taking Social Security yet, there are strategies to minimize the tax bite:
Strategy #1: Consider Roth Conversions Before Taking Social Security
Roth IRA distributions don’t count toward your combined income calculation. Converting traditional IRA money to Roth accounts before you start Social Security can reduce your future taxable income.
Strategy #2: Manage Your Withdrawal Timing
If you’re close to a threshold, timing matters. Delaying a large retirement account withdrawal until next year might keep you under the limit for this year.
Strategy #3: Use Qualified Charitable Distributions (QCDs)
If you’re over 70½, you can donate up to $105,000 directly from your IRA to charity in 2026 (this amount is adjusted annually). These QCDs count toward your required minimum distribution but don’t count as income, which could keep you under the Social Security taxation thresholds.
The Bottom Line
Here’s what you need to remember about Social Security taxes in 2026:
- Calculate your combined income using the formula I showed you
- Compare it to your filing status thresholds
- Consider filing even if you’re not required to—you might get money back
- Set up tax withholding if you’ll owe taxes to avoid a big April surprise
- Watch for your SSA-1099 form in January 2027
The tax system around Social Security is needlessly complex, and those 1984 thresholds that were never adjusted for inflation mean more retirees face taxes every year. But understanding the rules puts you in control.
If your combined income is well above the thresholds, make peace with the fact that you’ll pay taxes on your benefits—it means you’re fortunate enough to have additional income in retirement. If you’re near the thresholds, small planning moves can make a big difference.
And if you’re entitled to a refund or tax credits but haven’t been filing? This year is the year to start. The IRS typically allows you to claim refunds for the previous three years, so if you’ve been leaving money on the table, there’s still time to get some of it back.
Retirement should be about enjoying the life you worked hard to build—not stressing about tax surprises. Take an hour to run through these calculations, and you’ll know exactly where you stand for 2026.
