Do I Owe Taxes on Social Security Disability Benefits?

When you are applying for Social Security Disability Insurance (SSDI) benefits, or SSD benefits, you will need to know if you will be required to pay taxes on the amount of money you receive from the Social Security Administration (SSA). Even if you already receive SSD benefits, you might be unsure about whether you need to report the benefits as income on your taxes, and whether you will need to pay taxes on the total amount. In short, there is no straightforward answer to this question because the answer depends upon your particular situation. An experienced national disability benefits lawyer can help you to understand your specific situation and whether your SSD benefits are likely to be taxed.

In the meantime, the following information can help you to determine whether you may need to pay taxes on the benefits you are receiving.

When You Have Additional Income, Your SSD Benefits May Be Taxed 

The Internal Revenue Service (IRS) provides detailed information about situations in which a recipient of SSD benefits may be required to pay taxes on SSD benefits. One of those situations involves you earning additional income beyond the SSD benefits you are receiving. If you have a total annual income of at least $25,000 including the SSD benefits you are receiving, a part of your SSD benefits may be taxed. You will need to work with a lawyer to determine what you may owe in taxes.

When You Are Married and Your Spouse Has an Income 

When an SSD benefits recipient is married and the spouse earns an income, then your SSD benefits may be taxed. In situations where an SSD recipient and his or her wife earn $32,000 or more together annually with your spouse’s annual income and half of what you receive through SSD benefits, a part of your SSD benefits will be taxed.

However, if you are married but file your taxes separately, and if you have not lived with your spouse during the prior tax year, your spouse’s income will not figure into whether or not your SSD benefits will be taxed. In this type of situation, you will only be required to pay taxes on your SSD benefits if you have an annual income of $25,000 or more including the SSD benefits and any other source of income.

Determining How Much You Will Owe in Taxes 

When you are likely to owe taxes on your SSD benefits, you might want to be able to have a rough calculation of the amount of tax you will owe. Ultimately, the specific amount of tax you owe will depend upon your annual income and, if your spouse’s income will figure into the equation, your combined annual income that includes your spouse’s income. The taxable amount of your SSD benefits will depend upon the amount you earn per month—the tax amounts are applied to income brackets.

Contact a National SSD Benefits Lawyer for Assistance 

Whether you have questions about SSD benefit taxes or applying for SSD benefits, one of the experienced national Social Security disability attorneys at our firm can assist you with your case. Applying for disability benefits can be a complicated process, but one of our experienced lawyers can assist you. Contact the Law Offices of Stephen Barszcz today for more information.

Resource:

irs.gov/faqs/social-security-income/regular-disability-benefits/regular-disability-benefits