What is the taxable limit for Social Security benefits in 2023?

In 2023, the taxable limit for Social Security benefits is determined by a person's provisional income, which is the total of their adjusted gross income, nontaxable interest, and half of their Social Security benefits. Based on this provisional income, up to 85% of Social Security benefits may be subject to taxation.

This means that for individuals whose provisional income exceeds certain thresholds, a significant portion of their benefits, specifically up to 85%, can be included in taxable income. This structure is designed to gradually tax benefits based on the recipient’s overall income level, rather than applying a blanket rule that would treat all benefits as taxable or nontaxable.

The other options do not accurately describe the rules governing the taxation of Social Security benefits. For example, there are situations where 50% of benefits may be taxable, but that applies only to those with provisional incomes within a specified range, not as a flat limit.