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Taxes and Your SSD Benefits

Posted: March 11, 2011

In many cases, Social Security Benefits are not taxable. However, there are some exceptions. If your adjusted gross income, interest on any tax exempt bonds you may have, and half your Social Security benefits all total more than a certain base amount, you will have to pay federal income tax on a portion of your Social Security benefits.

The base amount varies depending on your filing status. If you file taxes as a single person, the base amount is $25,000. If you are married and file jointly, the base is $32,000. If you are married and have lived with your spouse for any part of the tax year but are filing separately, the base is zero. If you are married but have lived apart from your spouse the entire year, the base amount is the same as for a single person, $25,000. (These figures are based on 2010 tax information.)

After the end of each year, you will receive a Social Security Benefits Statement (Form SSA-1099) showing the amount of benefits you received the preceding year. The statement is to be used only for completing your federal tax return, should any of your benefits be subject to tax. For more information about taxation of benefits, ask for IRS booklet 915 at any Social Security office or Internal Revenue Service office.

It is a good idea to contact an accountant or tax consultant before you apply for Social Security Disability benefits.

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