I understand how/if Social Security Disability is taxed.
- ~50% Taxable if: half SSD + AGI > $25,000
- ~85% Taxable if: half SSD + AGI > $34,000
My question is: if my SSD is taxed (let's say 85%), will that taxable amount be added to my total AGI thus (potentially) increasing my tax bracket? Or, is that 85% just taxed at my current tax bracket based on other income?
For example, filing single:
- if adjusted gross income is $30,000 putting me in the 12% tax bracket
- and if SSD is $28,000 (half: $14,000); therefore 85% taxable because $14,000+$30,000 is greater than $34,000.
- 85% Taxable SSD would then be $23,800.
- Question: Is that $23,800 also taxed at 12%, or is it added to the $30,000 which would bump me into the 22% tax bracket for the amount above $38,700?
Thank you,
Drew
