topic Re: Under what circumstances does SSDI count as taxable income? in Deductions & credits

Under what circumstances does SSDI count as taxable income?

xavierf2 — Sun, 26 Jan 2025 05:56:04 GMT

If I am married to someone who receives SSDI and/or SSI, and file married filing separately will their benefits be counted as taxable income?
Also, how do I get the web application to stop trying to label them as a dependent other than unchecking "has no income"

Unfortunately, we are getting divorced soon and I am trying to avoid complicating things tax wise.

Re: Under what circumstances does SSDI count as taxable income?

JohnB5677 — Sun, 26 Jan 2025 14:21:35 GMT

Perhaps, under certain income circumstances SSDI and SSI may be taxable; however, if you are Married filing Separately, and living together, there may be a tax advantage. As you can see from the chart below, there is no tax advantage for Married Filling Separate, and living together at any time during the year.

If who are Married Filing Separately and lived with their spouse at any time during the tax year, up to 85% of Social Security income may be taxed

The base amount for your filing status is:

$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 lived with your spouse at any time during the tax year.

I’m not sure what you mean by “how do I get the web application to stop trying to label them as a dependent.” Even

The taxpayer's spouse cannot be claimed as a dependent. Even if you file separately.
Dependents are either a qualifying child or a qualifying relative of the taxpayer.
- If you have other dependents, and you do not want to claim them
- Go to My Info
- Answer the questions regarding the dependent’s status.

Re: Under what circumstances does SSDI count as taxable income?

Hal_Al — Sun, 26 Jan 2025 15:26:37 GMT

Q. If I am married to someone who receives social security or social security disability income ( SSDI) and file married filing separately, will their benefits be counted as taxable income?

A. Yes.

Social security (including SSDI) becomes taxable when your income, including 1/2 your social security, reaches:

Married Filing Jointly(MFJ): $32,000

Single or head of household: $25,000

Married Filing Separately and lived with your spouse at any time during the tax year: $0

You may be thinking that filing Married Filing Separately (MFS) is going to save you money, because you won't have to add your spouse’s income to your return. That doesn't work. There is a special rule that says SS becomes taxable at zero ($0) other income when Filing as MFS.

The doubled standard deduction will usually wipe out most of the spouse’s income, on a joint return. And you will still get the use the lower joint filing rates.

Before making a decision to file as MFS, you should run test returns and compare. You can use this tool: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1

SSI (Supplemental Security income) is different from social security income. It's a form of welfare and is not taxable or reportable. If you get an SSA-1099, you do not have SSI.