Ask the Expert: If I collect Social Security, how much will I owe in taxes?

I’m in my late 60s and single. If I wait until age 70 to collect Social Security and it’s my only income, do I pay any taxes on my benefit regardless of how much I collect?

Most people with no retirement income except Social Security don’t pay federal income tax on their benefit, and New York State doesn’t tax Social Security. But the size of your benefit is factored into its tax treatment.

The tax treatment of Social Security depends on what’s called your “combined” income, which starts with your adjusted gross income (AGI). That’s on line 11 of Form 1040. AGI includes distributions from retirement accounts, earnings from employment or self-employment and taxable investment income like interest and dividends. Your “combined” income is your AGI, half of your Social Security benefit and any tax-exempt interest income you may have earned.

Under current rules, if you’re single and your “combined” income is between $25,000 and $34,000, you may have to pay federal income tax on up to 50% of your Social Security benefit. So if your benefit is $2,500 a month, up to $1,250 of it might be taxable.

If you’re single and have “combined” income of more than $34,000, up to 85% of your benefit may be taxable. So only $375 of that $2,500 monthly check would be tax free.

Use the interactive Social Security Retirement Estimate calculator to get a dollar estimate of your future benefit at 70. The calculator is linked to your actual earnings record. You can type in your own assumptions, increasing or reducing the number of years you’ll work and your hypothetical future salaries to see how each scenario would affect your ultimate benefit.

The bottom line:

The tax treatment of your Social Security benefit depends on your “combined” income.

More information:

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