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Will I have to pay taxes on my SSD benefits?

On Behalf of | Mar 27, 2015 | Social Security Disability

April 15, the deadline for filing your tax returns, will be here in no time. For people in Harrisburg who began receiving Social Security Disability benefits last year, the process of filing a tax return may be a bit more confusing than it was last year. Do you have to pay taxes on your SSD benefits? And if so, how much? We hope that the following information will help you gain a high-level understanding of the tax obligations that SSD recipients have.

According to the IRS, if you receive any type of Social Security benefits, you should have received a Form SSA-1099 in the mail. This form should explain the amount of benefits you received in 2014. It will help you understand whether you owe taxes on your benefits, and you will need to reference it when filling out your federal tax return.

The first thing that is important to know is that you will never be required to pay federal taxes on more than 85 percent of your SSD benefits. If you do not have any income outside of your benefits, it is likely that you will not have to pay taxes on your benefits.

If you do have other income, your filing status and combined income will determine your tax rate. According to the Social Security Administration, your combined income the sum of your nontaxable interested, your adjusted gross income and half of your SSD benefits.

If your combined income falls between $25,000 and $34,000 and you are filing as an individual, you will have to pay taxes on as much as half of your benefits. If your combined income is higher, you may have to pay the highest tax rate for benefits: 85 percent.

For those who are married and filing jointly, your combined income will include your spouse’s income. You will pay taxes on up to 50 percent of your benefits if the total lies between $32,000 and $44,000, and you will pay taxes on up to 85 percent if your total combined income is higher than $44,000.

Although these are the basics for filing a tax return while receiving benefits, it may be helpful to consult with an attorney if you need further assistance in understanding your benefits and how they may affect your taxes.


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