Are Social Security Disability Benefits taxable?

On Behalf of | Jul 26, 2023 | Social Security Disability |

The question of taxation on Social Security Benefits is a complex one. It sometimes goes beyond simple confusion. Truthfully, it depends on what type of Social Security Benefits you have and how much you receive.

It is probably taxable if you make substantially more than your social security benefit. Here is a quick look at when Social Security Benefits are taxable. Chances are you will only pay taxes on 85% of your benefits.

Filing a federal return individually

This situation happens when you are single. When your income or combined income is $25,000 and $34,000, you only have to pay taxes on 50% of your benefit. If you make over $34,000, you will need to pay taxes on 85% of your income.

Filing a joint return

This situation happens when you and your significant other file a joint return. If your combined income is $32,000 to $44,000, you pay tax on 50% of your benefits. If your combined income is more than $44,000, you will pay tax on 85% of your benefits.

Married filing separately

This gets a bit more complex. You need to find your adjusted gross income. You need your nontaxable benefits plus 50% of your Social Security Benefits. Adding these two numbers together will equal your combined income. Then the rules for filing as an individual apply to your combined income.

Be sure to use your Social Security Benefit Statement to help you determine the benefits subject to tax. This statement comes out in January and may have information on what is taxable.