Federal Income Tax and Social Security Disability

Posted on: December 6th, 2014 | Comments Off

uncle samDo I have to pay taxes on my Social Security disability benefits?  This is a common question this time of year.  D. Michael Carmody, CPA, gave me an overview of the rules.  Some people have to pay federal income taxes on their Social Security benefits.  This usually happens only if you (and your spouse) have other substantial income.  This could include wages your spouse earns from working, income from rental properties or investments. 

 If you file a federal tax return as an “individual” and your total income is at least $25,000, then you may have to pay income tax on a portion of your benefits.  For persons filing jointly, $32,000 or more is the amount that can make your benefits taxable.

 Maybe your Social Security claim was approved during the year 2013 and you received a lump sum retroactive payment that covered prior years.  In that event you can apportion past-due benefits to previous years, thus lowering or eliminating the taxable amount of the lump sum per year, without having to file amended tax returns.  The formula for calculating your tax liability is highly technical and confusing.  It is recommended that you contact a tax professional to prepare your return. 

 If you do have to pay taxes on your Social Security benefits, you can make quarterly estimated tax payments to the IRS or have federal taxes withheld from your benefits.

 It should be noted that SSI (Supplemental Security Income) is not taxable.  For professional preparation of your tax return, contact D. Michael Carmody, CPA in Haddon Heights (856-310-0717)

Surviving the Holidays with a Disability

Posted on: December 6th, 2014 | Comments Off

It will soon be the “season to be jolly.”  The holiday season is especially challenging for those who are living with a chronic illness.  You may be too ill to participate as you have in the past.  Financial difficulties can add to the stress.  As the days become shorter at year’s end, the iconic holiday symbols offer light.  The glowing menorah and twinkling Christmas tree can represent hope.  Using the word “LIGHT,” here are some ideas for surviving the December holidays:

 Let go of expectations.  I spoke to therapist, Penny Page, LCSW, about the pressure we put on ourselves to have a “Hallmark” holiday:  perfect gifts, perfect decorations and food,  a joyous time when everyone loves each other.   When we’re unable to make that happen, we need to set aside the guilt and be realistic.    

 Identify what’s really important.  Ms. Page suggests that the family sit down early on and talk about what is most important to each person.  Challenge everyone’s view of what the holidays are supposed to be.  Then pick and choose what you feel you can do.  For example, maybe a potluck meal can replace the traditional feast.  Can you shop online or give gift cards?  Keep it simple.  

 Get help.  Plan ahead.  Formulate a “to do” agenda.  Ask yourself, “What is the easiest way to accomplish this?”  Ask each person in the family to take responsibility for some part of the holiday plans.  

 Have a conversation with your loved ones.   If you “don’t look sick,” you need to help them understand what your life is like and what to expect from you at the holidays.  “Put it out on the table,” says Ms. Page.  “Speak to the fact that you may not be able to give people what they’re asking for.” 

 Have one ally in the family who “gets it” and enlist help in speaking to the rest.   Explain what your limitations are, i.e., “I get tired easily, so I’ll only be able to stay for about two hours” or “I’ll do my best to attend your party but if my illness flares up, I may have to bow out.” In the end, recognize that some folks may refuse to accept that you are disabled.    

 Take care of yourself.  Your health comes first.  It’s tempting to abandon healthful living routines around the holidays.   Be sure to get the sleep you need, eat right, and avoid toxic people. 

 Here’s wishing you a bright and peaceful holiday season.

 Penny Page is a licensed clinical social worker with a private practice in West Deptford.  Her phone number is (856) 848-6330. 

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Categorised under: Disability

The Geography of Disability

Posted on: December 10th, 2013 | Comments Off

Millions of disabled workers in the United States rely on disability payments (Social Security Disability, SSI or both).  About 6 percent of the nation’s working-age population receives disability payments.  Some states have more than 10 percent on disability.  In New Jersey, that figure is just 3.8 percent.   What is the explanation for this disparity?

Lack of education.  Low rates of high school completion are linked with high rates of disability receipt.  This explains why so many people in the Appalachia region and the deep South are on disability.  Those with more education are better able to adapt to a wider range of work.

Age.  Nearly 70 percent of beneficiaries are age 50 or older; nearly one in three are over 60.  The median age in New England and Appalachia is higher than the national average.  Therefore, they have high rates of disability.

Native-born population.  Contrary to popular belief, immigrants are far less likely to get disability checks than native-born individuals.  New Jersey, along with New York, Florida and Texas have large foreign-born populations and lower percentages of disability recipients.

Industry versus service-oriented.  In states whose economies rely on manufacturing, mining and forestry, there are larger percentages of disabled persons than places like New Jersey which have a service-oriented economy.  Therefore, we see more persons on disability in the industrial Midwest as well as the South and Appalachia.

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Categorised under: Disability, SSI

Drowning in Debt? Can bankruptcy be the answer?

Posted on: December 10th, 2013 | Comments Off

Disability and debt often go hand in hand unfortunately.  Those who are sick and out of work will face a pile of bills, collection phone calls, and threatening letters.  I sat down with attorney Barbara Snavely to discuss how bankruptcy may help my clients.

There are two types of bankruptcies for individuals, Chapter 7 and  Chapter 13.   A Chapter 7 works best for those who:

-       have lots of unsecured debt (for example, credit cards, utility bills, unsecured personal loans);

-        do not own much property;

-       do not have much income.  The maximum income for an individual is approximately $60,000 per year; for a family of four, it’s around $100,000.

In a Chapter 7, a trustee who is appointed by the court gathers and sells your non-exempt property.  The proceeds from the sale are used to pay your creditors  according to the priority of the claims.

A Chapter 13 is a good option for those who:

-       owe debt that is the result of a temporary financial setback;

-       own lots of property, such as houses, land, cars, that you want to

entirely protect;

-       have steady, regular income with which to make payments to a trustee;

-       are behind in rent, mortgage or car payments.

A Chapter 13 works to consolidate, order and, in some cases, reduce your debts.  Then, instead of juggling your bills and creditors, you will make one monthly payment (except for home mortgage and car payment loans) to your court-appointed trustee who will handle your creditors.  No more calls from creditors!

Once your bankruptcy case is filed with the court, your creditors cannot collect on your debts because of what is call and “automatic stay.”

Social Security Disability payments are protected in bankruptcy in most cases.  Since SSI payments are intended to provide basic living expenses, they may never be taken in a bankruptcy.

The prospect of filing bankruptcy can be frightening.  Just talking to a bankruptcy attorney does not necessarily mean you have made a decision.  It can just be part of an information-gathering process.  Don’t wait until your circumstances are desperate and you only have days in which to stop foreclosure, vehicle repossession or other collection actions.  Consultations are usually free.

This is a simplified overview of the options.  There are numerous guidelines for each type of bankruptcy.  Get professional advice from an attorney who concentrates in the area of bankruptcy.   Barbara Snavely is an associate in the Law Office of Joseph Rogers in Turnersville.  She can be reached at (856) 228-7964.

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Categorised under: Financial assistance

The Michael J. Fox Show — Is disability a laughing matter?

Posted on: July 21st, 2013 | Comments Off

I just saw a commercial for “The Michael J. Fox Show” which is part of the new fall line- up on NBC. Fox plays Mike Henry, a news anchor who had left his career to focus on his newly diagnosed Parkinson’s disease. The comedy series’ premise is that Mike decides to return to work and must now juggle career and family along with his illness.
In real life, Fox was diagnosed with Parkinson’s in 1991 but did not go public with it until 1999. He left “Spin City” in 2000 to spend more time with his family. Fox has become an activist for research towards finding a cure for his disease.
I’ll be interested to see how the new show will portray life with a chronic illness. How will they weave disability jokes among the usual sit-com gags? Experts say that humor is good for the body and spirit, so why not?
Our own governor, Chris Christie, will have a cameo in one of the show’s fall episodes. I’ll leave that topic to some other blogger.

The “Michael J. For Show” will premier on September 26 at 9 PM on NBC.

New fall comedy tackles disabiity issues.

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