Knowing when Social Security benefits are taxable can be confusing, and many taxpayers leave it to their CPA or tax-preparation software to let them know if they were taxed on Social Security income in a given tax year. In reality, it's not very difficult to estimate how much of your Social Security benefits may be subject to tax.
The key is to become familiar with a concept called "combined income." To arrive at combined income, taxpayers should add one-half of Social Security benefits received to adjusted gross income. In the accompanying video, Fool contributor Asit Sharma discusses combined income and offers easy steps on how to use it to estimate what portion of your benefits may be taxable.
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