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Some SSA Disability Applicants Need to File Tax Returns

Most recipients of Social Security disability benefits do not earn enough income to worry about paying Federal income taxes. However, it is often beneficial for you to file a tax return, as you may be eligible for some credits.

InsuranceNewsNet reports that if you have other sources of income in addition to your disability benefits, you may have to pay some taxes. The IRS determines this by using a base level that equals one-half the amount of SSDI benefits you receive, plus all of your other sources of income.  

In 2009, the base level for individuals was $25,000, and couples filing together had a base level of $32,000. If your income for the year was above either of these figures, about half of your SSDI benefits may be eligible to be taxed.

In most cases, you would need to have another source of income in addition to SSDI to reach that level, as most people receive no more than $1,100 per month, or about $13,200 annually. Note that workers' compensation benefits are generally not taxed.

If you received a lump sum of disability benefit payments after waiting years to finally get them, do not feel the need to pay taxes on these all at once. In fact, that can be quite costly. The IRS allows the payments on your lump sum benefits to be spread out over a few years. If you are unsure of how to do this correctly, consider using a tax attorney or tax preparer to help you to complete the process smoothly.

Fort Lauderdale, Florida disability lawyers, LaVan & Neidenberg, represent over 5000 disability claimants. Our disability attorneys have experience with cross examining agency-appointed medical and vocational experts and take time when speaking with you about your disability claim. Call us today at 1-888-234-5758 for a FREE legal consultation. There is NO OBLIGATION to hire our firm and there are NO FEES unless one of our trained disability lawyers wins your case.