Social Security benefits can go a long way toward enjoying a more comfortable retirement, but it's not always easy to determine how much you'll receive. There are many factors that influence your benefit amount, including the age at which you claim and your work history. But taxes could also take a bite out of your monthly payments, especially if you live in one of the 12 states that tax Social Security. Here's what you need to know about taxes and your benefits -- and how you can potentially avoid them. Image source: Getty Images. State taxes on Social Security Your benefits could be subject to both state and federal income taxes. Your state taxes will depend on where you live, and the 12 states that tax benefits include: Colorado Connecticut Kansas Minnesota Missouri Montana Nebraska New Mexico Rhode Island Utah Vermont West Virginia If you live in one of the 38 states that don't tax Social Security, you're off the hook. But even among the 12 that do tax benefits, regulations are slightly different from state to state. Some states tax Social Security, but you're exempt if your income falls below a certain limit. In Missouri, for instance, you won't owe state taxes on your benefits if your adjusted gross income is under $85,000 per year (or $100,000 per year for married couples filing jointly). Also, these regulations could change at any time. The best way to determine whether your benefits will be subject to taxes, then, is to check your individual state's laws regarding Social Security. How federal taxes will affect your benefits State taxes on Social Security are only half of the equation, and you could also owe federal taxes on your benefits. Your federal taxes will depend on your provisional income, which is half of your annual Social Security benefit, plus your adjusted gross income, plus any nontaxable interest. Percentage of Your Benefits Subject to Federal Taxes Provisional Income for Individuals Provisional Income for Married Couples Filing Jointly 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 For instance, say you're earning $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, and you'd owe federal taxes on up to 85% of your benefit amount. How to reduce your taxes It's not always possible to reduce your Social Security taxes, especially if you live in a state that isn't tax-friendly. But there is a little-known way to reduce or even eliminate federal taxes: Contribute to a Roth account. When you invest in a Roth IRA or Roth 401(k), you'll owe taxes on your contributions upfront. Your withdrawals, though, are tax-free, and they also don't count toward your provisional income. Say that you're still earning $20,000 per year in benefits, but rather than withdrawing $40,000 per year from a 401(k), you pull it from a Roth IRA, instead. In that case, your provisional income would be just $10,000 and you'd get out of paying federal taxes on your benefits altogether. It's not always possible to contribute to a Roth IRA, especially if most or all of your savings are in a traditional IRA or 401(k). You can do a Roth conversion to move your money to a Roth account, but keep in mind you'll owe taxes on the amount you convert. Taxes can be confusing, especially when it comes to Social Security. But having at least a general understanding of them will pay off, and it can help you head into retirement as prepared as possible. The $18,984 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $18,984 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.The Motley Fool has a disclosure policy.Source