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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2442
Experience:  IRS licensed Enrolled Agent and tax instructor
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I have received disability benefits in May 2015. I will be

Customer Question

I have received disability benefits in May 2015. I will be receiving a back up pay for the last year and half in the amount of 24,000. I was told that I won't be taxed on it because I haven't worked since then. My only income is through my husband. Apparently,
he filed me with him as a joint income and his salary at that time was 75000 until October of 2014. HIs new job makes a little more. My question is do I have to pay taxes on it when I receive it bec it will be a lump sum since it is my income. Or is there
a way to get it in installments so if I have to pay taxes on it then they wouldn't take much more than at one lump sum.
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you. I am assuming you are talking about social security disability, correct?
Expert:  emc011075 replied 1 year ago.
Here's how social security income, including disability, lumps sum or monthly payments are taxed. If you total income + 1/2 of your social security income is more than 32.000, up to 85% of your social security income will be taxable. Based on the information you provided, if you file a joint return with your husband who's income is 75,000 that will be the case. If you file married filing separate, 85% will be included in taxable income automatically.
Expert:  emc011075 replied 1 year ago.
I am sorry if this is not the answer you were hoping for. Here's link to social security administration website about how social security income is taxed if you have other income. If you file a joint return with your spouse, both of your incomes will be included in calculation. Let me know if you have any questions. And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.
Customer: replied 1 year ago.
yes, it is disability benefits and I was already provided with this information with their pamphlet. I guess my question would be if there is any way not pay as much taxes if I were or were not to get the lump sum, isn't it possible that instead of sending the lump sum, I can request it in installments. The reason being is that the lump sum is for 20012,2013,and 2014 while living in NY and being supported ny the 75000 income from m y husband. How much will they tax as far as percentage of that money? to call you, would that be an additional $18 on top of the $47 that I already paid.
Expert:  emc011075 replied 1 year ago.
It is not the distribution or lump sum, it is your husband's income. The benefits become taxable if your total income plus 1/2 of your social security benefits are more than 32,000. Regardless how much of the benefits you are getting, his 75,000 income is already more than the 32,000 threshold. Depending on your tax bracket, here's how you can estimate it. Multiply your total benefits by 0.85 and than multiply the result by your tax bracket percentage. You are most likely in 15% tax bracket. So, if your total benefits are 25,000 your calculation will:25,000 x 0.85 = 21,250 (that would be the taxable portion of your benefits included in income)21,250 x 0.15 = 3,188 (that would be the estimated tax on your benefits) I am including a link to online tax calculator. If you enter actual income and actual amount of our benefits, you should get a pretty good how much of taxes you will be paying.Here's the link: If you want to give me the information, I can calculate it for you- your total benefits expected- total other income- pretax deductions (401K, medical insurance through employer) I wish I had a better answer for you. I understand your frustration, the calculation don't take in account cost living adjustment. 75K in NY is not the same as 75K in Alabama or Montana.
Expert:  emc011075 replied 1 year ago.
I see you read my respond. Do you have any questions? Is there anything else I can help you with today?
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