Should I Plan For SSDI Benefits To Be Taxed?

Many people who have become disabled and are applying for Social Security Disability Insurance (SSDI) benefits want to know more about whether they can expect to keep the full amount of the payments they receive, or whether other types of benefits could reduce those payments or whether those payments will be taxed. It is extremely important to understand your obligations concerning taxes and your disability benefits. Generally speaking, it is not a given that your SSDI payments will be taxed, and you could certainly be in a situation where you do not owe any money in taxes based on the amount of SSDI benefits you received. However, for some SSDI recipients, their benefits could be taxable. It is always important to discuss the specifics of your case with an attorney, but one of the national SSDI benefits lawyers at our firm can provide you with general information about taxes and SSDI benefits.

If Your Only Income is from SSDI Benefits, Those Payments May Not Be Taxed 

The key thing to know about planning for taxes and SSDI benefits is that a certain amount of income is exempt when you are receiving Social Security disability benefits. Accordingly, if your SSDI benefits are below a certain threshold and you have no other income (and no spouse with a separate income), your benefits will not be taxed. However, if your benefits exceed a certain amount, or if your household income exceeds a certain amount, then you may need to anticipate that a portion of your SSDI benefits are taxable, according to the Internal Revenue Service (IRS).

What is that threshold income amount that results in benefits becoming taxable? It depends upon whether you are married and your spouse has an income, and what the amount of the household income is in total.

If You Alone Have an Individual Income of $25,000 or More 

For individuals receiving SSDI benefits who have an income of $25,000 or more, including SSDI benefits alone or other sources of income, then a portion over $25,000 of your SSDI benefits are likely to be taxable. Before you make any assumptions about the amount that will be taxable, however, or what you will owe, it is important to seek advice from an attorney.

If You Are Married and You Collectively Have an Income of $32,000 or More 

For SSDI recipients who are married, the IRS then looks at the total income of the couple when determining whether any portion of SSDI benefits can be taxed. In short, a combined income of $32,000 or more with your spouse per year means that your benefits could be taxed. The IRS will consider what portion of the income comes from your spouse’s income and your SSDI benefits. It is important to know, however, that this calculation assumes you are filing your taxes jointly. If you are married but file separately, then the $25,000 threshold discussed above will be applicable.

Contact a National SSDI Benefits Attorney 

If you have any questions about your SSDI benefits, you should get in touch with one of the national disability benefits lawyers at the Law Offices of Stephen Barszcz as soon as you can for assistance. Contact us today to ask any questions or to receive help with your case.

Source:

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