When it comes to taxes, it is important to keep up-to-date with all the IRS highlights. That is particularly important if you have a qualifying disability and you are already receiving SSDI or SSI benefits. Those who are on disability benefits and work should also pay close attention to this information.
The IRS has reminded Americans with a disability of the Tax Highlights for Persons with a Disability. The publication you will need to have the latest tax information is Publication 907. However, there are several Publications that you may be interested in as well.
IRS: relevant publications for Americans with a disability
Among the 2 most important publications, Publication 524, dealing with the “Credit for the Elderly or the Disabled” and Publication 525, Taxable and Nontaxable Income. But what is new in Publication 907?
For example, the maximum amount that you can contribute to your ABLE account. In this case, this new maximum contribution limit is worth $17,000.
What is more, some eligible ABLE accounts may allow you to contribute a limited additional amount. So, it is a great idea to make the most of these IRS advantages in the USA.
Do you have to pay taxes to the IRS for any of your disability benefits?
In general, if you only receive Social Security Disability Insurance, it is very unlikely that you have to pay taxes to the IRS. However, it may be a different story if you rely on other sources of income while you receive Social Security Disability Insurance.
Those SSDI recipients who get additional income over the year should take into account that part of their benefits may be taxable. This usually happens when all your earnings plus half of your SSDI benefits are more than:
- 25,000 dollars if you are filing separately despite being married and lived apart for the whole year (2023 for this year’s tax return).
- 25,000 dollars if you are single, a qualifying surviving spouse, or a head of household.
- $0 if you are married filing separately and lived with your spouse any time in 2023.
- $32,000 if you file together and are married
*SSI benefits are not taxable
Source: https://www.irs.gov/pub/irs-pdf/p907.pdf