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If you are preparing for retirement, you may wonder whether you will pay income tax on Social Security.  Many individuals rely on Social Security as a key source of retirement income.  It may surprise you to learn Social Security benefits can be taxed.  Understanding how income tax applies to Social Security benefits is important for retired nurses to help with their financial plan.  This article aims to help clarify taxes on Social Security income.  You’ll also explore some tax efficient strategies to help with your retirement planning.

The Basics of Social Security Income Tax

Social Security and income tax image on www.drgeorgenecollins.comWhen it comes to Social Security, about 40% of retirees will pay federal income taxes on their benefits.  Social Security income, an important income source for many, is subject to specific tax rules.  And the rules of income tax on Social Security can be complicated.  That’s because the tax relies on many parts.  These parts include provisional income, filing status, and thresholds.  For example, if your provisional income exceeds certain thresholds, you might pay taxes on part of your benefits.  Let’s break down these parts to help you understand your possible Social Security tax bill.

Deciding Taxable Social Security Income

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To help decide income tax on Social Security, let’s explore provisional income.  The IRS calculates provisional income by adding your combined income.  Combined income may include wages, self-employment, interest, dividends, and your Social Security benefits.  But deciding your taxable Social Security income goes one step further because your tax bill may depend on meeting specific thresholds.

Understanding Taxation Thresholds

Deciding whether you meet the tax threshold to pay income taxes depends on your filing status.  For single filers with a provisional income between $25,000 and $34,000, up to 50% of your Social Security benefits may be subject to income tax.  If your provisional income exceeds $34,000, you may pay tax on up to 85% of your benefits.

For married couples filing jointly, if the provisional income ranges between $32,000 and $44,000, up to 50% of the Social Security benefits may be taxable.  And if the combined provisional income exceeds $44,000, couples may pay tax on up to 85% of their benefits.

Tax Efficient Strategies for Social Security Income

Understanding the tax implications of Social Security income can help retired nurses decide on efficient strategies to lower their tax bill.  These may include managing other sources of income, timing distributions from retirement accounts, and considering tax efficient investments.

Let’s explore some potential tax efficient strategies for you to consider.

Manage Combined Income

Consider keeping your total combined income below the threshold to avoid or reduce taxes on your Social Security benefits.

Optimize Accounts and Investments

Consider increasing savings in retirement accounts and prioritize withdrawals from tax-free accounts like a Roth IRA.

Optimize Investments

Interest income from municipal bonds is typically free from federal income tax.  And sometimes, free from state and local taxes.  If you plan to invest in retirement, consider the tax advantages of investing in municipal bonds.

Social Security Claiming Strategy

Delaying the start of Social Security benefits may help reduce the impact of taxes on your benefits.  Consider speaking with a tax professional or Financial Advisor to help you decide your Social Security claiming strategy.

Consider Roth Conversions

Converting traditional retirement accounts to Roth IRAs may help reduce taxable income in retirement.

Understand State Tax Laws

Know how your state treats Social Security benefits for income tax purposes because state laws vary.

Understanding the Complexity

Income tax image on income tax on social security blog post at www.drgeorgenecollins.comIncome tax on Social Security benefits can be complex.  It’s important to stay informed to help you plan your tax efficient strategy.  Consider speaking with a tax professional or Financial Advisor to help gain a clear understanding of how taxes may impact your retirement income.




In conclusion, Social Security benefits aim to provide valuable support during retirement.  And it’s important to know your income tax obligation on your benefits.    Staying informed and seeking professional guidance when needed aims to help you make informed decisions to support your retirement goals.  Consider speaking with a tax professional or Financial Advisor to help you decide when to claim Social Security and to discuss efficient tax strategies that align with your retirement plan.


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Prior to rolling over any plan assets to an IRA, an individual should carefully consider various factors such as investment options, fees and expenses, services, penalty-free withdrawals, protection from creditors and legal judgments, required minimum distributions, and employer stocks depending on individual needs and circumstances.


Georgene Collins

Georgene Collins, RICP®, RN, PhD, MBA is a registered nurse turned Financial Advisor at Airey Financial Group. Georgene helps other nurses take control of their finances and prepare for retirement. Georgene began her career with Airey Financial Group in 2017 after retiring from 30 years in healthcare. Georgene holds the Retirement Income Certified Professional (RICP®) designation from The American College of Financial Services. She holds health and life insurance licenses and a long-term care certificate in Indiana and Illinois. Georgene is a Registered Representative and Investment Advisor Representative and has earned the FINRA Series 63 and 65 registrations.