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Disability Law Offices of Tony Adderley

Disability Benefits And Taxes

  • By: Tony Adderley
  • Published: September 29, 2014
Disability Benefits And Taxes

Over 10 million people in the United States now receive Social Security disability benefits. Many of them are confused about whether or not those benefits are taxable, and they’re confused for a good reason. The answer is, it depends. There is no clear-cut, across-the-board answer. If you receive Social Security disability benefits in southern California and you are uncertain about your tax obligation, consult at once with an experienced Los Angeles Social Security disability attorney.

Speaking generally, your Social Security disability benefits are not subject to federal taxes if you have no other source of income. Disability benefits are designed for people who are disabled and unable to work, so if disability benefits are your only income, the government usually will not tax those benefits. However, if you have what the government considers a “substantial” income alongside the monthly Social Security disability benefit, then you may have to pay taxes on the benefit. Individual taxpayers earning from $25,000 to $34,000 annually will pay taxes on roughly half the amount of their benefits. In other words, about 50 percent of the total benefit amount is subject to taxes at the taxpayer’s marginal rate. Those who are married and file jointly may earn a combined income of $32,000 annually before their disability benefits become subject to federal taxes.

Those individuals who earn more than $34,000 annually, or married couples filing jointly who together earn more than $44,000 annually, will have to pay higher taxes on their monthly benefits. For those earning this much income, about 85 percent of your disability benefits become subject to taxes at the marginal tax rate. On other words, if your marginal tax rate is 10 percent, you would have to pay a ten percent tax on 85 percent of your benefit.

Several states also tax Social Security benefits but California does not. A good Social Security benefits lawyer can look at your income and its sources and help you determine what is and isn’t taxable in your particular situation. In the southern California region, if you have questions regarding your benefits, or if you need to apply for and begin receiving disability benefits, speak at once to an experienced Los Angeles Social Security disability attorney.

About the Author Tony Adderley has been working as a professional advocate for
individuals entitled to Social Security Disability (SSD) and worker’s
compensation benefits for more than 20 years.