Are my Social Security benefits subject to income tax?

Answer:

A portion of your benefits may be subject to income tax if your modified adjusted gross income (MAGI), plus one-half your Social Security benefits, exceeds specific limits. Your MAGI equals:

.   Adjusted gross income (or the adjusted gross income of you and your spouse if
     married and filing jointly), including wages, interest, dividends, taxable pensions,
     and other sources,

.   When you are working more than one job

.   When you have nonwage income, such as interest, dividends, alimony,
     unemployment compensation, or self-employment income

.   When you will owe other taxes on your return, such as self-employment tax or
     household employment tax

.   When your withholding is based on obsolete W-4 information for a substantial part
     of the year (e.g., you've gotten married, gotten divorced, gained a dependent,
     experienced income fluctuations)

To ensure that you have the correct amount of tax withheld, obtain a copy of IRS Publication 919. It should help you compare the total tax to be withheld for the year to the tax you anticipate owing on your return. It can also help you determine any additional amount you may need to withhold from each paycheck to avoid owing taxes when you file your return. Alternatively, it may help you identify if you are having too much tax withheld.