How is the amount of taxable Social Security benefits determined?

The amount of taxable Social Security benefits is determined by the individual's total income, specifically the combination of adjusted gross income, nontaxable interest, and half of the Social Security benefits received during the year. This means that as a person's income rises, more of their Social Security benefits may be subject to taxation.

The formula used to determine taxability involves comparing the individual's combined income against certain thresholds. If the total falls below those thresholds, the benefits may not be taxable at all. If the total is above those thresholds, a percentage of the benefits can become taxable, which reflects the financial capacity of the individual to bear the tax burden given their overall income situation.

Thus, total income plays a crucial role in establishing how much of Social Security benefits will be taxed, making it the correct choice in this context.