Are Social Security payments taxable?

Whether your Social Security benefit payments are taxable depends on your total income and marital status.

According the the IRS, if Social Security benefits were your only income in 2008 then it is likely that they are not taxable.

Your benefits may be taxable if you have income from other sources.

There are base amounts of adjusted gross income that, based on your filing status, serve as a sort of trigger for potential tax liability.

These amounts in 2008 are as follows:

• $32,000 for married couples filing jointly. 
• $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year.
• $0 for married persons filing separately who lived together during the year.

A quick test to see whether some of your benefits may be taxable involves adding one–half of the total Social Security benefit you received to all your other income, including any tax exempt interest and other exclusions from income.  Then compare this figure to the baseline income amounts above.