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jerryj
New Member

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

 
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Opus 17
Level 15

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

[removed]

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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5 Replies
Opus 17
Level 15

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

[removed]

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
re2boys
Level 9

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

If she is required to file an income tax return, she should report all income, including dividends and capital gain distributions. However, if her sole income is SSI and the the mutual fund distributions, she would not need to file a federal return.  Depending on which state, she may be required to file (PA for example requires filing if total taxable income over $33..
SweetieJean
Level 15

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

Opus 17
Level 15

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

Unless the mutual fund is tax advantaged, like an IRA, then dividends are taxable income even if they are reinvested.  The broker will report the dividends to her on a form 1099-DIV.  However, if her total income is less than $6200 (or $10,200 in some cases) then no tax is actually owed.

Because state tax laws are different, state tax might be owed.  She can prepare a free turbotax return to see if any tax is owed using the Tax Freedom edition, or the Absolute Zero edition, if she files before the deadline.

If your income is less than $31,000, you can file using the TaxFreedom edition, which includes complicated forms not normally included in the "regular" free version of Turbotax. The IRS requires it to be a separate web site. https://turbotax.intuit.com/taxfreedom/


*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Texas Roger
Level 15

Does My daughter who lives on SSDI and has $2000 in a mutual fund need to pay taxes on the dividends?

The income limits are $6300 (or $10,350 in some cases) in 2016.

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