Will my Social Security Disability Benefits be Taxed? How much of my SSD benefits are taxable?
As a law firm specializing in Social Security Disability benefits, we often receive questions from clients regarding taxes and SSD benefits. Many people wonder whether their SSD benefits are taxable or not. The short answer is: it depends.
Social Security Disability Benefits and Taxes
Whether your Social Security Disability benefits are taxable or not depends on your total income and filing status. If your only source of income is your SSD benefits, then your benefits are not taxable. However, if you have additional sources of income such as wages, self-employment income, or investment income, then a portion of your SSD benefits may be subject to federal income tax.
The Internal Revenue Service (IRS) uses a formula to determine how much of your SSD benefits are taxable. The formula is based on your "combined income," which is the sum of your adjusted gross income, nontaxable interest, and half of your Social Security benefits. The IRS compares your combined income to certain thresholds to determine whether any of your benefits are taxable.
For individuals, if your combined income is between $25,000 and $34,000, then up to 50% of your benefits may be taxable. If your combined income is more than $34,000, then up to 85% of your benefits may be taxable. For married couples filing jointly, if your combined income is between $32,000 and $44,000, then up to 50% of your benefits may be taxable. If your combined income is more than $44,000, then up to 85% of your benefits may be taxable.
As a law firm specializing in SSD benefits, we understand the complexities of the tax rules related to SSD benefits. If you have questions or concerns about how taxes may affect your SSD benefits, please don't hesitate to contact us. Our experienced attorneys are here to help you navigate the process and ensure that you receive the benefits you deserve.