Baltimore Social Security Disability Lawyers: Tax Rules Affect Benefits

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Individuals who have become disabled and receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) rely on these benefits when their disability prevents them from working. What many people do not realize is that, under certain circumstances, their benefits must be reported as taxable income. Our Maryland Social Security Disability lawyers will explain the difference between the two and under what circumstances they may be taxable.

Social Security Disability Insurance (SSDI)

SSDI benefits are provided to disabled people who are no longer able to work, regardless of their income and other financial resources. In certain circumstances, an individual may be required to include a portion of their benefits as taxable income. In order to find out whether you need to include this information on your federal tax return, you will need to consider what you obtain from SSDI, as well as any other supplemental income you receive.

To do this, you take one half of your disability benefits, and add that amount to your other income like wages, investments, business profits, and other revenues. If the amount is more than $25,000 for a single filer, or $32,000 for joint filers, it is possible that you will be required to include a portion of your benefits as taxable income. For those filing as an individual, you may have to claim up to half of your benefits as taxable income if you earn between $25,000 and $34,000. Those making more than $43,000 can be expected to include 85 percent as taxable income. Joint filers earning $32,000 to $44,000 would need to claim the same percentages as taxable income.

In most cases, people who receive SSDI payments do not surpass these income levels, so their benefits are generally not taxed. However, if a spouse earns enough that it puts their income above the threshold, it can impact their taxable income. In this case, the couple should consider the tax implications and discuss their options with an experienced SSDI lawyer to avoid any penalties.

Supplemental Security Income (SSI)

SSI benefits are for disabled individuals who can no longer work and are struggling financially. People who receive SSI benefits are limited in how much income they can receive from other resources, but their benefits are never taxable. Tax laws are set up so that people receiving these benefits will not have to pay taxes on them, since they are generally not in a position to have any other income that would be considered a tax liability.

Maryland Social Security Disability Lawyers at LeViness, Tolzman & Hamilton Help Clients Secure the Benefits They Deserve

 If you are collecting SSDI or SSI benefits in Maryland, and you are concerned about your taxes or have questions about your benefits, contact the reputable, experienced Maryland Social Security Disability lawyers at LeViness, Tolzman & Hamilton. We will answer all of your questions and make sure that you are receiving the maximum allowable benefits that you deserve. For a free case review, call us today at 800-547-4LAW (4529) or contact us online.

Our offices are located in Baltimore, Columbia, Glen Burnie, and Towson, allowing us to assist those who have been denied Social Security benefits throughout Maryland, including those in Anne Arundel County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Parkville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.