Social Security Disability Benefits and Taxes

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Social Security Disability Benefits and Taxes

When you are receiving Social Security Disability (SSDI) benefits, every little bit helps. Because you are unable to work, your income might be a little tighter than you’re used to, and every penny counts. However, even when you are collecting these monthly benefits to survive, there’s still a chance that you’re going to have to worry about taxes. That’s because the federal government, in an effort to help keep Social Security and its benefits afloat, now collects taxes on SSDI benefits for some people.

The key word in that paragraph is “some.” A majority of recipients never have to worry about their Social Security benefits being taxed. However, like most things, the key number here is you total household income.


Even though you are collecting SSDI benefits, there’s a chance that you might have another source of income. In addition, you might file jointly with someone else who is working, and collects an income. In these situations, if the total household income is over a certain threshold, you might find yourself having to pay taxes on your Social Security disability benefits. What’s the threshold? It depends. If you are living or filing as a single individual, the magic number is $25,000 per year. As long as your total income from all sources is less than that, you do not have to worry about your SSDI payments being taxed. If your annual income is between $25,000 and $34,000, you can expect to pay taxes on about 50% of that income. If you bring in above $34,000 a year, you will be expected to pay taxes on 85% of your benefits. The same is true if you file jointly, although the numbers are slightly different. When filing jointly, you do not have to pay taxes on a combined income lower than $32,000. Between $32,000 and $44,000 you will be taxed on 50% of your disability earnings, and if your combined income is above $44,000 you will have to pay taxes on 85% of your SSDI benefits.

Source: http://socialsecurity.tblog.com/social-security-disability-benefits-and-taxes/19znpynvak268


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