Social Security: Do I Need To File a Tax Return?


If your entire income is from monthly Social Security payments, you might not need to file a federal tax return if you fall under a certain financial threshold. But even when that’s the case, there could be times when you’re better off filing a return.

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As a general rule, if Social Security benefits were your only income, your benefits are not taxable and you probably don’t need to file a federal income tax return, according to the Social Security Administration. But if you received Social Security benefits plus other income, your tax obligation depends on how much you earned.

You must pay taxes on your Social Security benefits if you file a federal tax return as an individual and your combined income exceeds $25,000 a year. If you file a joint return, you must pay taxes if you and your spouse have a combined income of more than $32,000. If you are married and file a separate return, you probably will have to pay taxes on your benefits, the SSA says.

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But even if you don’t technically have to file a federal return, there are situations when you probably should.

For example, if you had any tax withheld during the year — either from Social Security payments themselves or from any other sources, such as quarterly estimated tax payments or carried-over refunds from prior years — you should file a return, MarketWatch reported. In many cases you’ll get most, if not all, of those taxes back in a refund.

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You should also file a return if you earned other income from investments, including interest, dividends and gains from the sale of investments. Even tax-exempt income from municipal bonds or U.S. savings bond interest can push your income above the threshold. If that’s the case, you should file a federal tax return.

Here are some other examples of when you might need to file a return, according to MarketWatch:

Also, if you used a health savings account to pay for medical expenses during the past year, you must file a tax return to account for those withdrawals against your qualified medical expenses.

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