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Social Security Social Security benefits and tax issues


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Old 06-02-2017, 03:41 PM
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Social Security Disability

Hello -
I begin receiving SS disability benefits in July 2017:

$2500 per month for me
$1200 per month for my two children ($600 each)

My wife's take home is roughly $85000.

How much of my disability will be taxed, if any?

Should I file jointly or individually?

Thank you
DB



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Old 06-03-2017, 12:50 PM
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Social security disability is potentialy partially taxable (just like regular social security is) if 1/2 of your social securty and your wife's salary is over a base amount. Type in an inter-net search engine social security tax formula.



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Old 06-03-2017, 04:20 PM
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Thanks. So I will receive a check each month with no taxes deducted. And when I file my joint taxes (using the social security 1099) with my wife in January 2018, I will know how kick I owe. Correct?


Last edited by Dabhob33 : 06-03-2017 at 04:22 PM. Reason: Add more info


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Old 06-03-2017, 07:39 PM
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How much of my disability will be taxed, if any?=========>it depends the amount of your provisional income that is AGI +50% o fyour social security disability benefits; aslongas the amt If you are married and you file jointly, and you and your spouse have between $32k ~$44K of provisional income as said above per year thern you need to report 50% of your SSD income to your gross income. If you have more than $44K then 85% o f your SSDB will be added to your gross iuncome If you are single, and you have between $25K~$34K of provisional income , then you need to include 50% of your SSDB on your gross income . if your icnoem as single exceeds $34k then 85you?re your SSDB will be added to yoru gross income So,How big a portion of your SSDI benefits are subject to tax depends on how high your income is.


Should I file jointly or individually?========>it is up to you;you need to check pros and cons in deciding your filing status; Separate returns could produce tax savings if one spouse has a lot of medical expenses and a low income. By filing separately, the partner with the doctor bills might be more likely to meet the 10% of AGI threshold needed to itemize medical costs. Taxpayers age 65 or older can still use the 7.5 %threshold through 2016. Only one spouse on a joint return must meet that age to get the lower deduction percentage. Many tax-cutting credits and deductions are forfeited when couples file separate 1040s. You can't take the earned income tax credit, claim adoption expenses or child and dependent care costs, use educational tax credits or even deduct the interest you paid on a student loan if you're married and filing separately. If you have children, you might find the child tax credit reduced because it phases out at different income limits for the various filing statuses. And the amount of capital gains losses you can deduct is cut in half.
The married filing separately rules are complicated further if you live in a community property state -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. In these places, state law determines whether your income can be considered as separate or community for tax purposes.
You should go ahead and figure your taxes as both joint and separate filers and use the method that produces the lower tax bill. But chances are, you'll find joint filing will be your best choice.plz contact an Enrolled Agent or a CPA doing tax es in your local area for more info in detail



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Old 03-13-2018, 09:46 PM
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How much of my disability will be taxed, if any?==========>it depends; Some people have to pay federal income taxes on the SSD they receive. Typically, this occurs only when individuals receive benefits and have other substantial sources of income from wages or other income; however,most TPs will not be taxed on their Social Securitydisability benefits, but some of your social security could be taxable. Your filing status and income level will determine whether your Social Security payments are subject to tax. In general, your benefits are not considered taxable as long as Social Security is your sole source of income.if you file jointly with your spouse, you may have to pay taxes on 50 % of yourSocial Security Disability benefits if you and your spouse have a combined income( I mean modified adjusted gross income; AGI +50% of your SSD benefits and add that to all your other income,i.e., interest or etc) of between $32K and $44K. If your total is greater than the MAGI amount, your Social Security benefits may be taxable: Take, for example, a married couple who have Social Security benefits of $28k,AGIof $31k and tax-exempt interest of $5kfor a total of $64k. Their MAGI is $50k.
Example of MAGI Calculations
A Social Security Benefits $28k
B Half of Social Security Benefits $14k
C AGI $31k
D Tax-Exempt Interest Income $5k
E MAGI (total of lines B, C and D) $50k, since the your MAGI is $50k>$32K, you need include 50% of your SSD in your MAGI. Also, if a minor child receives only Social Security disability benefits, he must file a return if the total of his unearned income exceeds $950. The IRS won't treat your child's SSD as your income. In fact, you cannot include them in your income even if you wish to. The only type of minor income you can elect to include with your own is investment or dividend income. However, if your child is a minor who must file a return because of SSD you are responsible for signing and filing the return if the child is too young to do so himself. Although you cannot claim your child's income as your own, you can pay the child's tax if you want to, and you can provide general information to the IRS about the return. If you sign the return, or if the child identifies you on the return as a third party designee, you can act as your child's representative during all interactions with the IRS that are connected with that tax return.


Should I file jointly or individually?=====>It is up to you; since you are married you can nnot file your return as an individual. you may file as a MFJ or MFS; in genral, some TPs who get SSD must pay federal income taxes on their benefits. But, no one pays taxes on MORE than 85% of their SSD.
You must pay taxes on your benefits If you file a joint return, you must pay taxes if you and your spouse have ?MAGI? of more than $32K If you are married and file a separate return, you probably will have to pay taxes on your benefits. Aslongas your mAGi is
$32k for married filing jointly
$25k for single, married filing separately (who lived apart during the entire year), head of household, and qualifying widow(er) with dependent child
$0 for married filing separately (who lived together during the year.)
This means that say as a joint filer if your MAGI is $34K, then 50% of the SSD of 17K needs to be included in your MAGI. if you are married, but filing separately, your Social Security Disability benefits will be taxable, regardless of what your income actually is. If you live in a community property state, you will be required to provide additional information regarding your spouse?s income. Please contact an IRS Enrolled Agent/a CPA doing taxes in your local area for your fed/state returns



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