another newbie question: how are you calculating taxable amount of social security income?

Gorlash

In 2024, I used TurboTax, and it gave these numbers:
social security benefits: $85,864
taxable amount: $34,385

in 2025, I am using FreeTaxUSA, and you give:
social security benefits: $88,008
taxable amount: $64,805

Did the tax calculations really change that much, this year?

Austyn

Hello Gorlash,

Thank you for contacting Support. I'm happy to help you understand this difference.

The tax rates themselves didn't change significantly between 2024 and 2025, so that's not what's causing the large increase in your taxable Social Security amount. The amount of Social Security that becomes taxable depends on your total income from all sources, not just your Social Security benefits.

The calculation looks at your "combined income," which includes:
- Your adjusted gross income (wages, interest, dividends, retirement distributions, etc.)
- Nontaxable interest
- Half of your Social Security benefits

Based on your combined income, either 0%, 50%, or up to 85% of your Social Security can become taxable. The IRS thresholds for these calculations haven't changed, but if your other income increased in 2025, more of your Social Security benefits would become taxable even though the benefits themselves only increased by about $2,144.

For example, if you had additional income in 2025 that wasn't present in 2024 (such as higher wages, retirement distributions, investment income, or other taxable income), this would push more of your Social Security into the taxable range.

I'd recommend comparing your total income between the two years - look at all income sources on both returns, not just the Social Security amounts. That should reveal what changed and why significantly more of your benefits became taxable in 2025.

Gorlash

Okay, I understand this… and this year was our first year for taking RMDs out of our investments, so our apparent income definitely jumped quite a bit…

Thank you for the clarification!