Questions on Taxes on SSD

by Ronald Kimmons

Social Security Disability (SSD) is a program funded by Social Security tax that gives benefits to those with disabilities. To receive SSD benefits, you must meet different requirements, such as that you must have paid Social Security tax. However, you need to take into consideration the fact that your benefits might also be subjected to federal taxes payment.

Do I Have to Pay Income Tax on My Benefits?

If you receive Social Security Disability benefits, you might be required to pay income tax on your benefits. Whether you must do so depends on how much your total income is when you consider your benefits. As of January 2011, if you earn more than $25,000 per year and you are single, the IRS requires you to pay income tax on your benefits. If you are married and you earn more than $32,000 per year, you are also required to pay income tax on your benefits.

Which Income Do I Consider To Determine if I Pay Taxes?

When you calculate your total income to determine if you are required to pay income tax on your benefits, you must consider all of your sources of income. You need to add the amount of SSD benefits you receive to the amount of other benefits you receive, such as Supplemental Security Income (SSI) benefits, retirements benefits, pensions, annuities and all other sources of income, even if they do not come from a job. (To receive SSD benefits, you cannot be working.)

Do I Pay Taxes Over 100 Percent of My Benefits?

The IRS can only levy taxes on a part of the benefits you receive. The percentage of your benefits that you need to consider when you pay income tax depends upon your total income and your filing status. As of January 2011, the government may require you to pay income tax on 50 percent or 85 percent of your benefits, depending on your income level. (The other 50 or 15 percent of your benefits is not taxable as income.)

How Do I Know If I Pay Income Tax on 50 or 85 Percent of My Benefits?

The percentage you have to pay in income tax depends on your filing status and your total income. If you file your tax return as a single person and your income is anywhere from $25,000 to $34,000, as of January 2011, you have to pay tax on 50 percent of your benefits. If your income is higher, you need to consider 85 percent of your benefits when calculating how much you should pay in income tax. If you file your tax return as a married person, you only consider 50 percent of your benefits as taxable income if your total income ranges from $32,000 to $44,000. If your income is higher than this limit, you are required to consider 85 percent of your benefits as taxable income.

About the Author

Ronald Kimmons has been a professional writer and translator since 2006, with writings appearing in publications such as "Chinese Literature Today." He studied at Brigham Young University as an undergraduate, getting a Bachelor of Arts in English and a Bachelor of Arts in Chinese.

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