Ssdi & Income Taxes

[poolguy11550]

Hi folks, I was awarded SSDI benefits during 2009 and recently got the income statement for reporting this income to the IRS. A friend of a friend, tells me to file separate rather than a joint return. I know nothing about this issue but is this accurate info?

[free_spirit_etc]

Thanks for the info Free, what about the benefit for a child, how is that taxed?

Poolguy,

This is actually talking about survivor's benefits:

From:

http://www.bankrate.com/brm/itax/tax_advis...tax_talk_a1.asp

" Generally, if a parent dies before a child reaches age 18, the child can get a monthly benefit. The benefit is usually paid to the surviving parent of the child, but the income really belongs to the child. The Form 1099-SSA issued by Social Security will report the benefits in the child's name and Social Security number. The surviving parent would not include the child's benefit in his or her individual tax return.

It is a parent's responsibility to make sure his or her minor children comply with the tax law and file any necessary tax returns and pay the tax thereon. Social Security benefits, whether survivors benefits or regular retirement income, are taxable only if they exceed a threshold when combined with other income of the individual.

To find out whether any of the child's benefits may be taxable, compare the base amount for their filing status (single) with the total of:

1. One-half of their benefits.

2. Plus all their other income, including tax-exempt interest.

The base amount for a single taxpayer is $25,000. If the child's only income is the Social Security survivors benefits, he or she would not owe any tax or be required to file a tax return."

But this, from http://www.nosscr.org/tax.html says

"Auxiliary [child or spouse] benefits. Benefits are included in the taxable income of the person who has the legal right to receive them. For example, a child’s benefits are added to the child’s other income (if any) to determine taxability, even though the benefits are paid on the parent’s earnings record. The child receives a separate SSA-1099.

So it looks like it would be the same for a child receiving auxiliary benefits.

I just wanted to make sure that they didn't include it as part of your income before I posted it for sure.

Hope this helps!

Free

Edited January 10, 2010 by free_spirit_etc