Dont understand why i owe , how do i know if the right amount of taxes federal and state is being taken out if Im on long term disability?

[tongree]

Or what do I have to do to understand why I owe???  Help

[Scooter1768]

Hi! 

Thank you for your question.  Generally, SSDI should be  reported on your income taxes the same as other types of income. The income could be taxable depending on the level of your benefits, other income you have and income of your spouse if you are married. 

You can estimate your taxes here by entering your income and tax filing status here: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

You can request withholding from SSDI here:https://www.ssa.gov/manage-benefits/request-withhold-taxes#:~:text=Mail%20or%20fax%20us%20a,fax%20us....

Hope that helps. 

[tongree]

Ty for responding,  I am not on ssdi. I receive benefits from my insurance company and trying to understand if after all these years on Ltd if I need a redo of my W-4, because I no longer have any dependents. Wondering if that would make a difference.  Don't want to keep owing every year.???

[Scooter1768]

Hello! 

There are some are some tricky rules about how this type of disability income is reported and thus includable in taxable income.  For example, some portion of the payments may not be taxable if you personally paid for the insurance providing the payment. But getting back to your specific question, If you are owing taxes when you file your annual tax return, you probably want to adjust your withholding so that is not the case. 

If you no longer have dependents, then you are presumably not receiving the potential credits that go along with supporting dependents and your filing status may have changed, too.

I recommend you use this calculator to estimate what you will be paying this year in your current situation, meaning without dependents or with any other changes. https://turbotax.intuit.com/tax-tools/calculators/w4/

Then if you find you want to have amounts withheld, or change the amount withheld, from your LTD, you can submit this form to your insurance company. https://www.irs.gov/pub/irs-pdf/fw4s.pdf