Jim Blankenship does a great job explaining this subject.
STeve
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If you’re receiving Social Security benefits, either for disability, retirement, or survivor’s benefits, when you file your tax return you will need to figure out if the benefits you’ve received during the prior year are taxable to you.
You’ll receive a Form SSA-1099 from Social Security sometime in the first months of the year, showing what your benefits were in the prior year, as well as any deductions that were made throughout the year – including Medicare premiums (Part B and/or Part D) if applicable, and federal income taxes withheld.
But are the benefits taxable to you? At most, 85% of your benefit might be taxed – and it’s possible that none of your benefit is taxable, all dependent upon your total income for the year. See this article for a detailed explanation of How Taxation of Social Security Benefits Works. …………….
read the complete article here: Your Social Security Benefits: Are They Taxable? – Getting Your Financial Ducks In A Row.
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