topic Can I take Section 179 deduction against my spouses disability or social security disability benefits taxable income? in Retirement tax questions

Can I take Section 179 deduction against my spouses disability or social security disability benefits taxable income?

Nychuck — Wed, 05 Jun 2019 23:59:32 GMT

Section 179 rules state you may deduct spouse wage if married filing jointly.

Is ERISA Long Term Disability benefits and Social Security Disability Income benefits considered wages or are they deductible using section 179?

No ... they are not considered wages.

Critter — Wed, 05 Jun 2019 23:59:33 GMT

No ... they are not considered wages.

Thanks for prompt answer Critter#2. I looked at IRS Inst...

Nychuck — Wed, 05 Jun 2019 23:59:34 GMT

Thanks for prompt answer Critter#2.

I looked at IRS Instruction book 4562, Page 5, re Line 11 and noticed the following verbiage:

"If you are married filing a joint return, combine the taxable incomes for you and your spouse."

That language doesn't make it so clear. Any other opinions? Thanks.

"Individuals. Enter the smaller of line 5 or the total ta...

Critter — Wed, 05 Jun 2019 23:59:36 GMT

"Individuals. Enter the smaller of line 5 or the total taxable income from any trade or business you actively conducted, computed without regard to any section 179 expense deduction, the deduction for one-half of self-employment taxes under section 164(f), or any net operating loss deduction. Also include all wages, salaries, tips, and other compensation you earned as an employee (from Form 1040, line 7). Do not reduce this amount by unreimbursed employee business expenses. If you are married filing a joint return, combine the total taxable incomes for you and your spouse "

It says your SE income + wages ... then if you are married the same for your spouse ... so the deduction is limited to EARNED income and the SSDI is not earned income. So again the answer is no ... however the 179 deduction not allowed on the current year return is carried forward until you can use it.

The Regulations make it clear that Section 179 is based o...

TaxGuyBill — Wed, 05 Jun 2019 23:59:37 GMT

The Regulations make it clear that Section 179 is based on the income from the "Active Conduct" of the trade or business (wages counts as a trade or business in this regard). Disability would not be "active conduct".