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Do people who collect disability have to file income tax?

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Do people who collect disability have to file income tax?

Postby peissawg31 » Sat Mar 23, 2013 1:22 pm

i collect disability, i cannot work at all, my husband works do we have to file jointly? do i have to declare my disability?
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Do people who collect disability have to file income tax?

Postby mahpee90 » Sat Mar 23, 2013 1:27 pm

i collect disability, i cannot work at all, my husband works do we have to file jointly? do i have to declare my disability?
That depends upon the source of the disability income.

If you are collecting Social Security Disability, up to 85% of it may be taxable if 1/2 of your disability + all other income is more than $32,000 if you file a joint return.

If you file separate returns and you lived with your spouse for even one day during the tax year, 85% of your SSDI is automatically taxable.

If you are collecting disability from a private insurance policy then it depends upon who paid the premiums and if you did, whether they were paid with tax paid or pre tax dollars. If you paid the premiums with tax paid dollars, all benefits are fully tax free. If you paid the premiums with pre-tax dollars or your employer paid them for you, all benefits are fully taxable to you. If you shared the cost with your employer and paid your share with tax paid dollars, the benefits are taxable in the same proportion as the premiums were paid by your employer.

If you are collecting state disability benefits that were paid for with a tax deducted from your pay -- such as CA SDI -- the benefits are tax free to you.

You are never required to file a joint return however you generally will pay the least total tax by filing joint returns.
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Do people who collect disability have to file income tax?

Postby shen » Sat Mar 23, 2013 1:40 pm

it depends on who pays the disability, you will receive a statement at year's end if you are to claim this as income
and generally filing jointly is preferred, there are some disadvantages filing separately, ie. EIC is disallowed filing separately and you also have to each file the same method, either standard deduction or itemized(Sch A) which in some cases hurts one or the other of the spouses
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Do people who collect disability have to file income tax?

Postby maureo » Sat Mar 23, 2013 1:43 pm

Please give me more details. Your husband works. How much does he earns? Do you have children?

Disability income together with your husband's income can be beneficial, but first we must find out how much he makes and how many children you have. Disability income by itself is not taxable.

We more information before we can answer your question.
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Do people who collect disability have to file income tax?

Postby annawon18 » Sat Mar 23, 2013 2:11 pm

You don't have to file merely because you collect disability. You may have to file for other reasons, such as investment income or foreign bank accounts.

You don't have to file jointly, but it would be a good idea. If you don't file jointly, then your husband will have to pay more tax.
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Do people who collect disability have to file income tax?

Postby peverell » Sat Mar 23, 2013 2:25 pm

You don't have to file merely because you collect disability. You may have to file for other reasons, such as investment income or foreign bank accounts.

You don't have to file jointly, but it would be a good idea. If you don't file jointly, then your husband will have to pay more tax.
You don't have to file jointly, but you'll have to pay tax on your disability if you file separately, and almost surely will pay more between you than if you file a joint return.
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