Mar 2

When Are Your Social Security Disability Benefits Taxable?

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social security disability changes for 2021Social Security Disability benefits are crucial for many Americans to survive. As we approach tax time, my team and I are often asked if the SSD benefits we obtain for them are taxable. Since we are not tax attorneys, we cannot give legal advice in that regard, but we can give general information and the typical lawyer answer is given – it depends.

For most people receiving social security disability benefits, their SSDI benefits are not taxable. However, they can become taxable if the person is also receiving income from another source or their spouse is earning income.

According to IRS.gov, your social security disability benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status. The base amount for your filing status is:

  • $25,000 if you’re single, head of household, or qualifying widow(er),
  • $25,000 if you’re married filing separately and lived apart from your spouse for the entire year,
  • $32,000 if you’re married filing jointly,
  • $0 if you’re married filing separately and lived with your spouse at any time during the tax year.

Even if your spouse didn’t receive any benefits, you must add your spouse’s income to your SSDI benefits when figuring on a joint return if any of your benefits are taxable. If you’re married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits.

What this means is that if you are married and file a joint return, you could be required to pay taxes on your benefits if the combined income is more than $32,000. According to the IRS. You could pay taxes on up to 50% of your benefits if your combined income is between $32,000 and $44,000 and up to 85% of your benefits if your combined income is more than $44,000.

If you’re single and file an individual return, you could pay taxes on up to 50% of your benefits if your income is between $25,000 and $34,000 and up to 85% of your benefits if your income is more than $34,000.

In summary, in most situations, your social security disability benefits are not taxed, but the more income you have individually or as a married couple, the more likely you are to have to pay taxes on Social Security disability benefits. However, it is always important that you consult with a tax expert before filing your taxes.

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Social Security Disability Book including cost of living adjustmentAttorneys Matthew Noyes and Lorrie Robinson help those fighting for their social security disability benefits. They are the authors of two books pertaining to qualifying for social security disability benefits. Attorney Matthew Noyes is a named partner at the Tampa Bay law firm of Perenich, Caulfield, Avril & Noyes, P.A. For a free consultation about you qualifying for social security disability benefits, call us at 727-796-8282 or simply click here to schedule a free consultation.

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