You Could Owe Social Security Benefit Taxes in 2026, and a Looming Change Makes This Even More Likely in 2027
Don't wait until you get your tax bill to start preparing for this.
As 2027 approaches, seniors on Social Security may need to prepare for potential taxes on their benefits. Your provisional income, which includes your adjusted gross income, nontaxable interest, and half of your annual Social Security benefit, determines if you owe taxes. Even if you avoid taxes this year, the 3.6% Social Security cost-of-living adjustment in 2027 could push you into a higher tax bracket.
The government may tax up to 85% of your benefits at your ordinary income tax rate, regardless of inflation. Roth retirement savings can help keep your AGI low, but there's no guarantee you can avoid taxes entirely. If you're concerned about a potential tax bill, consult an accountant for personalized advice and consider setting aside funds for the tax. You can also contact the Social Security Administration to have taxes withheld from your paychecks.
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