Do retirees with no income other than Social Security typically have to pay taxes on those benefits?

Retirees who receive only Social Security benefits typically do not have to pay federal income taxes on those benefits. The taxation of Social Security is based on combined income, which includes adjusted gross income, nontaxable interest, and half of the Social Security benefits received. For many retirees with limited income, especially those whose income is solely from Social Security, their total combined income falls below the threshold for taxation, meaning they do not owe any taxes on their Social Security benefits.

The thresholds for combined income vary by filing status. When a retiree's income is low and does not exceed these thresholds, the benefits remain untaxed. It is important for retirees to be aware of their total income sources, as additional non-Social Security income could potentially raise their total income enough to incur taxes on a portion of their Social Security benefits. However, in instances where Social Security is their only source of income, they usually find themselves in a tax-free situation.

This understanding provides retirees clarity in managing their tax liabilities and financial planning for retirement, as maintaining awareness of their income levels can help them avoid unexpected tax burdens.