Tax season is fast approaching, which means you need to understand what the tax rules are when you're getting your income through Social Security Disability Insurance (SSDI). If you are receiving SSDI benefits, you may be taxed on at least some portion of those benefits. Whether or not you have to pay taxes is going to vary depending upon a variety of factors including what your income is and what your marital status is. A disability benefits lawyer in Los Angeles can help you to determine both if you must pay taxes and how your benefits are taxed.
Do You Have to Pay Taxes on SSDI Benefits?
The IRS explains the rules for when SSDI benefits are taxable. According to the IRS, you can determine if any part of your benefits are taxable by comparing the "base amount" based on your filing status with the total of all income you have coming in from non-benefits plus half the value of your benefits.
For example, if you are getting $10,000 in benefits and have $10,000 in other income, you'd add up $10,000 (other income) + $5,000 (half your benefits) and compare this amount with your base amount for your filing status. If you're single, a qualifying widow or widower, or head of household, or married filing separately and you lived apart from your spouse all year, the base amount is $25,000. If you're married filing jointly, the base amount is $32,000.
If the total of half your benefits + your other income exceeds your base amount, that excess amount can be taxable. You should talk with a Los Angles disability benefits lawyer to find out the specific rules applicable in your situation and to get help both accessing your benefits and maximizing the amount of SSDI benefits you receive.