During the first few months of every year, many Florida residents are concerned about their taxes. While many people eagerly await their tax refunds, many others worry if they will owe taxes that year. During tax season, it is important for people to understand whether or not they need to pay in this year. If people are unsure, they could end up missing out on a refund or end up being late and owe interest and penalties.
When people rely on Social Security Disability Insurance income, they may own taxes on the amount that they received that year. People should receive a SSA-1099 form from the Social Security Administration during tax season. This form will tell people the amount of benefits they received during the year. However, it does not tell people how much of that money is taxed.
In general, if people earn more than the base amount of income each year then they have to pay some taxes on the amount in excess of the base. The base amount is $32,000 for married couples and $25,000 for other filing statuses. However, there is an exception to this rule, if a spouse files separately but the SSDI recipient lives with the spouse at any point in the ear, then all the SSDI benefits are taxable.
There are many tax intricacies that people need to understand this time of year especially if they receive SSDI benefits. In fact, the tax implications of SSDI benefits are just one of many legal issues disabled individuals need to consider when applying for these disability benefits. People in this situation should make sure they understand these issues and others in order to make the most out of their benefits. With the right help, however, SSDI can be extremely important for people who are unable to work because of a disability.
Source: Fox Business, “Taxation of Social Security and SSDI Payments,” March 25, 2015