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