If you are applying for or receiving Social Security disability benefits, you might wonder if they will be taxed. Usually, they are not, but a single person with an excess of $25,000 in income and a married couple with more than $32,000 in income will pay income taxes. Our Social Security disability attorney in Augusta can answer your questions about how benefits will affect your income. The IRS determines total income by using gross earnings and adding in 50 percent of the benefits along with any interest. A single person who earned more than $34,000 and a married couple who earned more than $44,000 will pay a higher tax rate on the benefits.
Workers’ Compensation and SSD Benefits
When someone is receiving both SSD and workers’ comp benefits, they could still be taxed on the portion of SSD benefits that they do not receive. However, a minor only pays taxes on the benefits they actually received. If you aren’t certain about what portion of your benefits is through workers’ comp and what portion is from SSD, call our Augusta social security disability lawyer.
Taxes on Past-due Benefits
When a person receives a lump-sum payment for past-due benefits, they could be pushed into a much higher tax bracket than normal. Even so, they may not need to pay taxes and should review Publication 915 from the IRS to see if they are eligible for relief. Our Augusta social security disability lawyer can offer further clarification for clients.
Deducting Lawyer’s Fees and Miscellaneous Considerations
A percentage of the fees of the Social Security disability attorney in Augusta might be deductible, but the IRS places a maximum limit on deductions of 2 percent of the adjusted gross income. If you need to make payments to a disability insurance carrier, you could be eligible for some relief as explained in IRS Publication 525. The Social Security Administration sends out tax forms when you receive back benefits. Compare Form 1099 with the Notice of Award to ensure that the numbers match and talk to your tax preparer about any discrepancies.
If you have questions about your SSD benefits, seek out the counsel of a competent tax specialist or our Social Security disability attorney in Augusta. You can reach Wilkinson & Magruder, LLP, at 706-737-0771.