If you’re a SSDI recipient and have an additional income source, you may need to file your taxes this year. Even if you don’t have to, you might still want to anyway, as you could receive a refund or additional tax credits that you would otherwise miss out on.
Nearly a third of SSDI beneficiaries are required to pay federal income taxes on their benefits if they have earned additional wages outside of their benefits. If you’re not sure if you have to file taxes for 2024, you’re in the right place.
Below, we’ll cover how you can determine whether you need to file and a couple of reasons why you might want to if you don’t have to. For more, check out the Social Security Fairness Act announcement and how to apply for SSDI.
Here’s how to find out if your Social Security benefits are taxable
To find out whether your Social Security benefits are taxable, you’ll need to identify if one-half of your Social Security benefits and any other income is greater than the base amount of your filing status.
Here’s how the IRS breaks down the base amount for filing status:
- $25,000 if you’re single, head of household, or qualifying surviving spouse,
- $25,000 if you’re married filing separately and lived apart from your spouse for the entire year,
- $32,000 if you’re married filing jointly,
- $0 if you’re married filing separately and living with your spouse at any time during the tax year.
If you have additional forms of income — whether it’s wages from another job, self-employment, interest or dividends — these should be factored in your calculation. If you are above the base amount for your filing status and need to pay federal income taxes, the Social Security Administration (SSA) will allow you to withhold taxes from your monthly benefit payments so you don’t have to pay a large bill come tax time.
A simple way to determine if your benefits are taxable is to look at your gross income, your total pre-tax earnings for the year.
You will need to file a return for the 2024 tax year:
- If you are an unmarried senior at least 65 years old and your gross income is more than $14,700.
- If you are filing a joint return with a spouse who is also 65 or older and your gross income is more than $28,700.
How much will I be taxed?
Another way to find if your Social Security benefits are taxable is to look at your combined income, which includes your adjusted gross income, nontaxable interest and half of your Social Security benefits together.
- If you are a single tax filer and your combined income is between $25,000 and $34,000, the SSA says you may have to pay income tax on up to 50% of your benefits.
- If you are a single tax filer and your combined income is more than $34,000, you may have to pay income tax on up to 85% of your benefits.
- If you are filing a joint return and your combined income is between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits.
- If you are filing a joint return and your combined income is more than $44,000, you may have to pay income tax on up to 85% of your benefits.
- If you are married filing separately and didn’t live with your spouse last year, your Social Security benefits are taxed as if you were a single filer.
- If you are married and filing separately while living with your spouse you probably will have to pay taxes on your benefits.
Finally, you can view Notice 703 from the SSA to see if your Social Security benefits are taxable.
On line 6b of Form 1040 or Form 1040-SR, you will report the taxable portion of your Social Security benefits.
You might want to file even if you aren’t obligated to
Some SSDI recipients might not have to file taxes this year, but they might want to anyway. The main reason, and the most obvious, is that you may qualify for a refund.
The other benefit that would come with filing your taxes is that you may qualify for certain tax credits, which can sometimes lead to a refund. If you qualify, you could receive the earned income tax credit, the child tax credit or child and dependent tax credits. The earned income credit is fully refundable if you don’t owe any taxes.
Where do I find my Social Security benefit amount?
In order to make the appropriate calculations for determining if you need to file a tax return, you’ll need your full Social Security benefit amount. Luckily, you don’t have to tally up everything yourself.
The Social Security Administration will send out a benefit statement via snail maile that will give you your benefit amount for the year of 2024. If you didn’t get it or lost it, you can easily view your benefit statement by logging into your My Social Security account online.
For more, don’t miss how you could lose your Social Security benefits and the Social Security Disability Insurance payment schedule.