taxes - Disabilities Message Board

sosickofthis · 08-25-2009, 11:03 AM

IF i get my ssd do i pay taxes on it and woill i pay taxes on any backpay? will I fill out an income tax return every year like when I worked? its just me and my 2 minor children. and when i obtained my attorney i had to sign papers that i would pay his fees out of my backpay that it wouldn't be deducted before i got it, but i keep reading that it comes out before i get it.

goldyfm · 08-25-2009, 11:19 AM

You probably will need to file, just to be safe. I know the attorney's fees were deducted from my back pay, being sent direct to the attorney. however, I still had to pay some copy fees not included in the amount the SSA paid him. The attorneys fees were tax deductible, so that helped on the taxes. Also, you can go back and file for years covered on the back pay so you are not claiming all of the back pay on this year. It will be broken down either on the letter you receive or the W-2 you get at year's end. I forget which one! I know I did not owe any taxes on my back pay, but as you know that depends on a lot of things and is unique to each taxpayer's status, etc.

I have noticed you seem to have a lot of questions and I wanted to let you know that the SSA website has publications online that answer most any question you may have regarding the disability process and what happens once you are approved. You may want to download and save a copy so you can reference when you think of something you may need to check. I know I found it very helpful.

Executor · 08-25-2009, 07:15 PM

Quote:

Originally Posted by sosickofthis

IF i get my ssd do i pay taxes on it and woill i pay taxes on any backpay?

Yes, you are required to file and pay taxes each year. It's considered "income."

Quote:

will I fill out an income tax return every year like when I worked?

Yes.

Quote:

when i obtained my attorney i had to sign papers that i would pay his fees out of my backpay that it wouldn't be deducted before i got it

This is because SS rules dictate that the check (back pay) be delivered directly to the applicant. Thus, the lawyer required you to sign some type of contract promising to pay.

Regards,

Ex

goldyfm · 08-27-2009, 10:24 AM

I distinctly remember that the attorney's fees were deducted from my backpay and that was indicated on the itemized letter I received. It may depend on the amount that one receives. The w-2 also listed the amount of attorney's fees deducted as it was tax deductible expense.

My accountant indicated that I would not have to file taxes, but that was based on the tax schedules and the amount of income from disability. I would check with whoever does your taxes as your income could be of a sufficient amount that would require you to file.