For any Inquiry : info@LondonDisability.com Toll Free 877-978-3136 Need Help Applying Need Help Applying
 

How Do My Disability Benefits Affect My Taxes?


You’re probably familiar with the requirements for federal income taxes; your employer usually withholds a portion of your pay, and you file your tax returns every year to make sure that you are not paying more or less than what you owe. However, receiving disability benefits can oftentimes impact the amount in federal income taxes you have to pay; that’s why, when you’re applying for disability in Maryland, it’s important to know exactly how your benefits will affect your taxes. You can also talk to your disability attorney in Maryland to figure out the specifics of your situation and plan how to proceed.

 

When you receive disability benefits, it is important to remember that you will pay taxes depending upon your total income – a figure that includes the benefits you receive. SSA form 1099, which lists how much money you have received from the SSA that year, will be your key to understanding how much you owe. The numbers break down as follows: if you make less than $25,000 (INCLUDING disability benefits) as an individual, or less than $32,000 if you’re filing jointly, then you do not have to pay income taxes at all.

 

Just as with regular income, social security benefits can place you in a higher or lower tax bracket, which determines what percentage of your income you will pay as tax. However, there are limits to how much of your benefits can be taxed. If you earn between $25,000 and $34,000 as an individual – or between $32,000 and $44,000 if filing jointly – only 50% of your SSI or SSDI benefits can be taxed; above these limits, only 85% of your benefits will be counted as taxable income. At no point can 100% of your benefits be taxed.

 

The last thing to keep in mind is that if you receive back payments from the SSA for your disability benefits, you should be careful about including them in the current year’s tax returns – they may move you up into a higher tax bracket, which would impact the taxes that you have to pay. Instead of including them in the current year’s income, file amended returns for the years that the back payment covered.

 

You can file your taxes manually, or ask that the SSA withhold your taxes from your benefits if you already know how much you owe.

London Eligibility, Inc., Attorneys & Lawyers  Social Security & Disability, Baltimore, MD
Top 60 Social Security Disability Blogs Winners Top 75 Disability Blogs Winners
Copyright © 2016 London Disability | All Rights Reserved. Disclaimer