A: Between 0% and 85% of your Social Security benefits will be counted as ordinary income and taxed at your marginal tax rate. The taxable portion is determined by looking at your “Provisional Income,” which only counts half of your Social Security, but all your other income (including tax-free interest from municipal bonds).
You will not pay any taxes if your provisional income is below $25,000 if you are single, or $32,000 if you are married filing jointly.
You will pay tax on 50% of your Social Security income that is above $25,000 if you are single or $32,000 if you are married filing jointly (MFJ). The proportion of your Social Security that is taxed increases to 85% of the Social Security once your provisional income exceeds $34,000 (single), or $44,000 (married filing jointly).
Most states do not tax Social Security, although there are 13 states that do.