Social Security benefits can be a lifeline in retirement, but Uncle Sam could take a bite out of your monthly payments.

Even in retirement, your Social Security checks could be subject to both state and federal taxes. Exactly how much you'll pay will depend on where you live and your income, and many retirees will be subject to taxes to some degree.

Fortunately, there are 38 states that don't tax Social Security at all. Here's what you need to know.

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How state taxes will affect your benefits

Each state has its own laws regarding Social Security taxes, so whether or not you'll be subject to state taxes will depend on where you live.

The 38 states that do not tax Social Security include:

Alabama Alaska Arizona Arkansas
California Delaware Florida Georgia
Hawaii Idaho Illinois Indiana
Iowa Kentucky Louisiana Maine
Maryland Massachusetts Michigan Mississippi
Nevada New Hampshire New Jersey New York
North Carolina North Dakota Ohio Oklahoma
Oregon Pennsylvania South Carolina South Dakota
Tennessee Texas Virginia Washington
Wisconsin Wyoming    

If you live in one of the 12 states that do tax Social Security, you may still be able to get off the hook depending on your state's individual laws.

In West Virginia, for example, Social Security benefits are exempt from state taxes if your adjusted gross income falls below $50,000 per year for individuals or $100,000 per year for joint filers.

Don't forget about federal taxes

Even if you're able to get out of state taxes, you could still owe federal taxes on your benefits regardless of where you live.

Your federal taxes will depend on a figure called your provisional income. This is half of your annual Social Security benefit amount plus your adjusted gross income and any nontaxable interest.

So, for example, if you're receiving $20,000 per year from Social Security and are withdrawing $40,000 per year from your 401(k), your provisional income would be $50,000 per year. Here's how much of your benefits could be subject to federal taxes depending on your provisional income:

Percentage of Your Benefits Subject to Federal Taxes Provisional Income for Individuals Provisional Income for Joint Filers
0% Less than $25,000 per year Less than $32,000 per year
Up to 50% $25,000 to $34,000 per year $32,000 to $44,000 per year
Up to 85% More than $34,000 per year More than $44,000 per year

Source: Social Security Administration

There is a loophole when it comes to federal taxes, however. If you're contributing to a Roth account (such as a Roth IRA or Roth 401(k)), those withdrawals do not count toward your provisional income.

If the majority of your savings are in a Roth account, that could reduce or potentially even eliminate federal taxes on your benefits.

For instance, if you're collecting $20,000 per year from Social Security and withdrawing $40,000 per year from a 401(k), your provisional income would be $50,000 per year, and up to 85% of your benefits would be subject to federal taxes.

But if you were withdrawing $40,000 per year from a Roth IRA instead, that amount would not count toward your provisional income. That means your provisional income would be just $10,000 per year, and none of your benefits would be subject to federal taxes.

Social Security and taxes can be confusing at times, but the more you know about how your benefits will be taxed in retirement, the more prepared you'll be heading into your senior years.