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Old 01-20-2014, 12:09 AM
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Location: Florida
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EITC: Disabled with newborn

I am disabled, receive SSDI and am a recent college grad. The plan was to go back to work doing freelance work from home to supplement my income but 4 months before graduation I discovered I was 10 weeks pregnant. (No lectures on irrisponsibility please. We were more than responsible but we recieved a precious gift). Baby was born Feb. 2013. I graduated Oct. 2012 but the IRS told me that I would still be eligible for EITC with my SSD and no other earned income. I tried filing today and was denied due to no earned income. My SSA earnings were low: $10,044 for myself and $3,348 for baby. I received an extension on paying back my loan so I also made no payment back this year. I filed single, head of household, babies father and I are not married but have been together for 10 years, and he has been out of work all year with health issues. I am not trying to get something for nothing. My income is very low and supporting 3 people and I was really depending on taxes to help me get back to work with supplies and licencing. Is the denial for EITC correct? Also, I did do some freelance work this past year but nothing I took seriously and, honestly, considered it more work for my portfolio; Practice if you will. I was paid cash but did get receipts. I am not registered as self employed, etc. If I can use that income what is a safe amount to avoid paying taxes or losing my SSDI for now? Any suggestions would be helpful. Thanks!



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Old 01-20-2014, 04:25 AM
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Originally Posted by AllTaxedOut View Post



#1; I graduated Oct. 2012 but the IRS told me that I would still be eligible for EITC with my SSD and no other earned income.



#2; I tried filing today and was denied due to no earned income. My SSA earnings were low: $10,044 for myself and $3,348 for baby. I received an extension on paying back my loan so I also made no payment back this year. I filed single, head of household, babies father and I are not married but have been together for 10 years, and he has been out of work all year with health issues. I am not trying to get something for nothing.



#3;My income is very low and supporting 3 people and I was really depending on taxes to help me get back to work with supplies and licencing. Is the denial for EITC correct?


#4;Also, I did do some freelance work this past year but nothing I took seriously and, honestly, considered it more work for my portfolio; Practice if you will. I was paid cash but did get receipts. I am not registered as self employed, etc. If I can use that income what is a safe amount to avoid paying taxes or losing my SSDI for now?
#1;Not really. The IRS considers some types of disability payments to be earned income, and as such, the income can be used to claim an EEITC or EIC on your federal income tax return. With the EITC, many people receive money back from their tax returns. Unfortunately, ssdi is not considered earned income for the purposes of taking that credit, thus, you need to have other forms of earned income in order to qualify.


#2;Head of household is a status used when filing taxes to get certain benefits and deductions. This is designed so that unmarried taxpayers who have a child or a relative that they are helping to care for will generate some tax benefits; the benefit to claiming HOH status is lowering the taxpayer's tax rate and also increasing the standard deduction amount. Head of household filing is designed to be more beneficial to the taxpayer than those who fall into the single or married and filing jointly category. A person filing as HOH gets a standard deduction larger than the deductions of single filers and depending upon circumstances, married people not living with their spouses can sometimes fall into this category.

#3; Unfortunately it is correct. Social security benefits do not count as earned income for the earned income credit on their own. If that is the only income you received during the year, you are not eligible for the credit.The SSA pays benefits to those under retirement age who are disabled and unable to do their former work or adjust to new work. This means that during the time that social security disability benefits are received, no employment or self-employment income will be received. This results in an ineligibility for the earned income credit. In the year that social security disability benefits are first received, or in the year they are no longer received, a taxpayer may also have employment income. This income is eligible for the earned income credit.

Note; earned income includes all the taxable income and wages you get from working or from certain disability payments. Taxable earned income includes:Wages, salaries, tips, and other taxable employee pay;Union strike benefits;Long-term disability benefits received prior to minimum retirement age;Net earnings from self-employment,i.e., freelance work included.



#4;basically, EITC is a benefit for working people who have low to moderate income. A tax credit means more money in your pocket. It reduces the amount of tax you owe and may also give you a refund.. To avoid paying taxes on ur SSDI, your MAGI needs to beless thn $25K as a HOH filer. To quickly figure out if your Social Security disability benefits are taxable, find out the total of the benefits you earned for the tax year and divide that number by two. Then add that one-half figure to your other gross income. If that total figure is less than the base amount for your filing status, you probably will not have to pay taxes on your benefits. If that figure is more, the benefits are taxable income. For example, if you earned $15k in Social Security disability benefits in 2014 and $30k at work before any deductions, you would add $7,500, which is half of your benefits, and $30k for a total of $37.5k. This number is higher than the base amounts,$25K, for individuals The income would be taxable. However, if you earned $15k in benefits but only earned $10k from work, the total is $17.5k, which is lower than the base amounts for individuals , $25K,..

Not to lose yur SSDI benefits from the SSA, you can work while receiving SSDI during a Trial Work Period. You can work for nine non-consecutive months within the first 60 months and earn a monthly income of up to $1,040 and still receive SSDI benefits. When the trial work period has ended, and you are working, you will no longer receive disability benefits for any month in which you earn more than substantial gainful allowance (SGA), which again is $1,040. If you are going to work, please keep in mind you cannot make more than this gross amount. Please contact the SSA for more info in detail; https://faq.ssa.gov/ics/support/tick...?style=classic



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