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socrateaser
socrateaser, Lawyer
Category: Tax
Satisfied Customers: 37960
Experience:  Retired (mostly)
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I myself made 53000 this year my wife is diabled she got

Customer Question

I myself made 53000 this year my wife is diabled she got lump sum payment of26000 plus payed 6000 to lawyer for disability are we going to have to pay income tax on her money? we do not own a home we rent . ithink I saw we are allowed 44000?
Submitted: 5 months ago.
Category: Tax
Expert:  socrateaser replied 5 months ago.

Hello,

I don't have sufficient information about the disability payment. What exactly was the $26,000 paid to cover (e.g., on-the-job injury, private disability insurance coverage, etc.)?

Customer: replied 5 months ago.
Private disability
Customer: replied 5 months ago.
She had a stroke in 2000 caused right side problems never fully regained all control. The money's were 12 months back payment from the time she was awarded disability
Expert:  socrateaser replied 5 months ago.

If your spouse paid the premiums for the insurance, herself, then the payments are not taxable at all. If your spouse's employer paid the premiums, then the payments are taxable as ordinary income (not wages, but taxable at your effective tax rate, which based upon your stated earnings is probably about 15% federal, 3.07% Pennsylvania).

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Expert:  socrateaser replied 5 months ago.

Hello again,

I see that you have reviewed my answer, but that you have not provided a rating. Do you need any further clarification concerning my answer, or is everything satisfactory?

If you need further clarification, concerning this matter, please feel free to ask. If not, I would greatly appreciate a positive feedback rating for my answer (click 3, 4 or 5 stars) – otherwise, I receive nothing for my efforts in your behalf.
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