i am approved now tell me about taxes
 

so i got my ssdi back pay not letter yet.. my hubby is employed.. do they take taxes out of your back pay or do you get hit hard at end of year , i dont need any more irs issues:( my questions is how much do you think they will tax me , because i already got the money , now i have to claim it on my taxes . aprox 26000. was my back pay. i cant have it withheld cause i already have it :)
thank you

First off congrats on winning. I had all of this ironed out before I got my backpay and monthly benefits. I have 25% taken out. I had it taken out of my backpay monthly payment. This is maybe a bit too much but I do not want to owe at th end of the year. I believe the breakdown is 10 15 or 25% you can have taken out.

i didnt know i was approved i called my bank and there was lots of money in it , i never remembering seeing a place when i first filed for ssdi to say i wanted taxes taken out, so i wonder now how much i will owe at end of year? we already owe 7000.00 for 2008 because we made a mistake or i should say turbo tax did. any ideas? we make over 32000. a year and we file married joint but i have not worked in 2 yrs ? thanks

Wish I could help you there I am not good at taxes. We take out the max 25% just to be safe. Then in February we get a little bit back. Hate to have to owe them. I did find out this benefit that all of you may want to look into. When my wife paid our property taxes last month we were told we now qualify for a break because I am on disability. So you may want to check this out. I would talk to someone from H&R Block or some other preparer about how much to take out. Good Luck!

I just wanted to bold that property tax discount part above - good to know.:)

i didnt not have anything withheld . didnt know i could.. so 25 percent of 26000.00 is aprao6500.00 so thats what i have to pay in on my taxes? at end of year i am so confused . and wondering now if back pay will hurt me now?

You could set aside 25% in a six month CD in a different bank than you usually deal with. This way you lock it up and make it difficult to get at and spend (but not impossible). Then, in January, when your taxes are computed, you would have money to pay income tax IF it was due. It may not be due. Depends upon other income. You need to talk to your tax preparer. If you didn't owe the money on taxes, you would still have it and could continue to save it. Then you get to keep the interest as well.

We had 25% withheld and I received close to what you got in backpay last year. So out of the 6,000 or so that they withheld we got almost all or it back. Reason being we have 3 kids and only had my wife's income for last year. With me receiving benefits plus her job we figured we may go up in a different tax bracket this year and have to pay more to the Government. So each person is different. Does your husband work? do you have any dependent children that you can claim? I would just call someone that can answer these questions for you.

A friend of mine who has been collecting for 3 years says you don't pay taxes on it.

Hello----So if your husband makes over 32K then you HAVE to pay taxes on 85% of your SSDI. But there ae a lot of variables because you may have a lot of deductions...like meddical expenses or kids to deduct. You need to contact a tax preparer to discuss all of this and they cn run the numbers and give you a very close number. If are going to owe there is several things that you can do. One option is to increase your husbands taxes or send in a payment to the IRS. But again you need to contact a tax preparer!!

I'd set a good amount aside in a separate account or a CD {as Janke suggested} just so you have it saved aside just in case you do have to pay something extra on your taxes.

thanks everyone for your i am a big panicker just part of my many medical problems , we went to hr and they are figuring it for us prolly about 5000.,, so we will hold it until next year, we have no kids left to claim no real dections and have been paying the last few years , and we were audited and owe them 7000, we are working on now.. whew the great thing is at least noe i am approved and will have a monthly income , that i will set up to have them max 25 percent taken out from now on , once i get my aproval letter so far all i have recieved is the back pay:)

If you can afford the 25% that's what I would do. We do the same thing and get back a refund. Well at least last year we did.

you could call the IRS at the 1040 number(cant remember it right now and cant find it) but its 1-800-***-1040, they are great help with tax questions and you dont have to pay them to answer like you do a tax preparer.

If the combined household income is less than $30,000, you pay no taxes on it.
If you want money witheld for taxes, in case you go over $30,000, go to irs.gov and complete form W4V and send it to social security. I am not sure of what address you would sent it to in your area, so you can call and they will give you the address.

Take care!!!!!!!:winky:

You can also go online to have the taxes withheld. Btw, withholding 25% myself as well.

If you are single, then the IRS will take 1/2 of your ssdi and add all your other income to that number. If it is less than $25,000 then none of your ssdi is taxable.

If it is more than $32,000 then 85% of your benefits are taxable. If between $25,000 and $32,000 then a worksheet will figure it out.

If married and filing jointly, the numbers are $32,000 and $44,000.

Any questions feel free to ask as I have IRS experience.

Joe

Joe,, I am confused,, you say married filing jointly,, 32,000 and 44,000 I dont understnad the two numbers,,, as I am sure me and my wife will be filing jointly,, I had STD before SSDI,, and now I will get my pension,, I have no idea how its going to work out tax wise

Sorry if that confused you. If you file jointly, then you will take 1/2 of your total Social Security payments for the year and add it to all your other income.

EX) SSDI $18,000
Pension $8,200
Wifes Wages $13,000
Bank Interest $200

1/2 of the Social Security is $9,000 and we add to that number, $21,400 ($8,200+$13,000+$200): Total would be $30,400 since that number is less than $32,000, then none of your SSDI is taxable on the 1040 and while you will put the $18,000 in the Social Security line, you would bring over $0 for the taxable amount.

Same situation, but your wife makes $33,000:

Now you have the $9,000 (1/2 of SSDI) and add $41,400 ($8,200+$33,000+$200). The total is $50,400 which is greater than $32,000 so we know that some of the SSDI will be taxable. The next limit is $44,000 (where 85% of the SSDI becomes taxeble)-the MAXIMUM.

So you would put the $18,000 in the Social Security line of the 1040 like the first example, but instead of $0 taxable, you would put $15,300 as Taxable
(85% of $18,000).

Hope this helps.

Joe

My husband won approval and the tax situation was a mess. They withheld 25% from the retro pay, but when we got the 1099 they indicated that they did not withold anything. We then got a corrected form in which they added in the attorey fee which made the tax situation worse. Six months later we got ANOTHER corrected 1099 in which they showed that they had taken out the 25%. It took them three attempsts, but they finally got it right. It was impossible to get anyone to understand what they had done; Extremely frustrating. Our accountant could not even get a straight answer from them. Thankfuly it finally worked itself out.
Good Luck!