RH&K - Rogers, Hofrichter & Karrh, LLC
770-884-6705
877-572-3949
Defending and
Empowering the Disabled
Over 20 years. 4000+ cases.
Experience matters.
Social Security Disability
Workers' Compensation

Long-Term Disability
Veterans Disability
Click Here for Site Topics

How are SSDI benefits taxed?

It is that time of the year again, when Georgia residents are preparing to file their tax returns with the government. While this is often an unpleasant experience for many, it can be particularly difficult when individuals have questions about how to report certain income.

This is often the case when it comes to Social Security disability benefits. Typically, a person who receives SSDI benefits will receive a 1099 form, which indicates his or her total amount of benefits. The individual will also work with a Notice 703, which is a worksheet included with the 1099.

Box 5 in the 1099 shows the person's net SSDI benefits, which constitutes the total in Box 3 minus the total in Box 4. One half of the total in Box 5 serves as the person's income for purposes of making tax calculations. The person may also have other sources of income, such as pensions, wages, dividends and interest. In addition, there may be tax-exempt interest and exclusions. Ultimately, all of this information is used for Line E in Notice 703. From this number, the person then calculates an adjusted gross income based on the SSDI benefits. Whether those benefits are taxable will depend upon whether the result here is larger or smaller than the base value for the person's filing status.

Ultimately, the forms may sound complicated, and in certain cases they may be. However, by working through the information, as well as using other sources like Publication 915 from the IRS, individuals can obtain guidance through the tax preparation process. Individuals might also find it beneficial to work with a tax professional if they need further assistance in filing out their return.

Source: Fox Business, "Taxation of Social Security and SSDI payments," March 25, 2015

No Comments

Leave a comment
Comment Information

Office Locations

Rogers, Hofrichter & Karrh, LLC

MAIN/MAILING
Rogers, Hofrichter & Karrh, LLC
225 South Glynn Street, Suite 1
Fayetteville, Georgia 30214

Phone: 770-884-6705
Toll Free: 877-572-3949
Fax: 770-460-1920

Email Us | Fayetteville Law Office Map

BRANCH OFFICE
2970 Clairmont Road NE, Suite 650
Atlanta, GA 30329
Phone: 770-884-6705
Toll Free: 877-572-3949
Fax: 770-460-1920

Email Us | Get Directions

BRANCH OFFICE
5 South Public Square
Cartersville, GA 30120
Phone: 770-884-6705
Toll Free: 877-572-3949
Fax: 770-460-1920

Email Us | Get Directions

FindLaw Network
Professional Associations
NOSSCR Distinguished AV | LexisNexis Martindale-Hubbell | Peer Review Rated For Ethical Standards and Legal Ability Super Lawyers ASNP | academy of special needs planners NOVA | Representing Veterans | Established 1993

Privacy Policy | Business Development Solutions by FindLaw, a Thomson Reuters business.