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Social Security Disability Benefits and Filing Your Income Tax Return

CaveyLaw.com > Social Security Disability (SSD)  > Social Security Disability Benefits and Filing Your Income Tax Return

Social Security Disability Benefits and Filing Your Income Tax Return

If you are receiving Social Security Disability benefits. Those benefits might be taxable, the first step in determining if your Social Security Disability benefits are taxable is to determine your “provisional income”.Income Tax and Social Security Disability

Provisional income is defined as the sum of any gross income earned, taxes on interest and one half of your Social Security Disability benefits. Yes, this is a math test. If you provisional income is greater than $25,000 for a single tax payer or $32,000 for a married tax flier jointly then up to 50% of the Social Security benefits are taxable.

In other words, one half of your Social Security Disability benefits will be subject to being taxed.

There is a second test for the taxability of Social Security Disability benefits which can reach up to 85% of your Social Security Disability benefits. If you are:

1. Single tax payer with a provisional income of over $34,000;

2. Married tax payer filing jointly with a provisional income of over $44,000 and;

3. The married person who filed separate returns but do not live apart, up to 85% of their Social Security benefits are taxable.

While the lawyers at Cavey and Barrett are not tax lawyers, we do recognize that the taxation of Social Security Disability benefits can be an issue for clients. Therefore, it’s a good idea that you talk with your tax lawyer before you file your annual income tax return so that you understand what portion, if any, of your Social Security Disability benefits may be taxable.

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