For most Americans, what is the tax status of Social Security benefits?

Social Security benefits may indeed be taxable for numerous Americans, depending on their overall income level. The IRS stipulates that if a taxpayer's combined income (which includes adjusted gross income, nontaxable interest, and half of their Social Security benefits) exceeds certain thresholds, a portion of their benefits becomes taxable. This means that while many individuals may receive their Social Security without any tax implications, others with higher incomes may have to include some of those benefits in their taxable income.

The determination of taxability can be nuanced—it's not a flat rule where all benefits are taxed or all are not. Instead, it's based on specific income levels and guidelines set by the IRS, making option B the most accurate answer in this context.