Noteboom The Law Firm

Tax Liability Regarding Disability Checks

Keeping track of what you will owe, or perhaps what you will receive back, from the government is important all year, not just at tax time. This way, you will not be surprised if you do owe money. In some cases, you have to pay taxes on your Social Security disability benefits.

If disability payments are your only source of income, you will likely not have to pay taxes. However, if you have other sources of income, or even if your spouse makes a decent living, you will have to pay taxes on some of your benefits. Consider the following rules of thumb regarding benefits and taxes:

·        If you file as an individual and your total income is more than $25,000 and less than $34,000, you will likely pay taxes on 50% of your benefits.

·        If your income is more than $34,000, you will pay taxes on 85% of your benefits.

·        If you and your spouse file jointly and make more than $32,000 and less than $44,000 together, you will pay taxes on 50% of your benefits.

·        If your total income with your spouse is more than $44,000, you will pay on 85% of the disability benefits.

·        If you are married but file separately, plan to pay taxes on at least some of your benefits.

Hiring a disability lawyer to help you collect your benefits is typically advised, but many people wonder if they must pay taxes on what their lawyer received, as well. The answer is that your legal expenses are tax deductible as long as you itemize your deductions. 

Obtaining disability benefits can be confusing in itself, but dealing with taxes afterward is even more foreign to many people. If you are not sure if you will have to pay taxes on your benefits, contact your lawyer. If the case if particularly complicated, he can likely refer you to a tax lawyer so you can get the answers you need.

If you or your loved one are suffering from a severe physical or mental disability, you should contact a Social Security Disability lawyer immediately to learn about your rights and determine eligibility. The process of securing Social Security Disability Insurance benefits and/or Supplemental Security Income (SSI) can be difficult and overwhelming. Don't go it alone! The disability lawyers at LaVan & Neidenberg, located in Ft. Lauderdale, FL understand the inner workings of the Social Security Administration and will help you navigate the system. Call us today for a FREE legal consultation - 1-888-234-5758.