I recently was aprroved for social security disability with payment dating back to June 2009. I received $54,000. I want to plan for tax liablility. I reside in Delaware. When I make my estimated tax payments--how much should I estimate for federal and state tax? Thank you.
Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.
If you are single, and SSDI is the only income that you have, it will not be taxable. However, if you have other income, I would need to know how much and what type to estimate your federal tax liability.
Please note that Social security is not subject to Delaware state income tax.
I'm married and file jointly on our federal return. On our State Return (Delaware) we file married but separately. Our gross income (not counting this lump sum) is approximately $80,000. this includes the monthly benenfit I will be receiving from social security.
I am going to presume a few things because I don't have all the information that I need (you can update me or correct what I have wrong and that will lead to a better estimate)
Presuming you and your spouse are both under 65, and that you get approx. $1800 per month in SSDI.
If you receive the 54K in 2012, and your regular SS benefits are 21600, and the rest of your income is approx 58,400, your federal tax liability would be approx. 14,000. So you could subtract your withholding (whatever comes out of paycheck or other payments for federal tax) and get the amount you need for estimated payments. For example, if your husband has $300 withheld every two weeks from pay for federal tax, withholding would be approx. $7800, and you would need to pay $6200 in federal estimated tax.
Please note that you have the option to use a different method of figuring taxable SS, you could figure the tax on the payment for each year---and see if that results in a lower tax...for instructions, see: lump sum election, page 11: http://www.irs.gov/pub/irs-pdf/p915.pdf
also note that you will not need estimated payments for DE, since SS is not taxable for DE state tax purposes.
Please let me know if I can assist you further.