Do 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)
A new disability process has been launched to expedite Social Security Disability claims filed by veterans who already have a VA rating of 100 percent permanent and total. Social Security will now treat these veteran’s applications as high priority and issue expedited decisions similar to the way the agency currently handles Wounded Warrior claims.
Unfortunately, a 100 percent disability from the VA does not automatically entitle a veteran to Social Security Disability. Veterans must go through the same medical process as all other claimants, and if they meet all the requirements of Social Security Disability they will be entitled to receive a disability benefit in addition to the VA check.
“While we can never fully repay them for their sacrifices, we can be sure we provide them with the quality of service they deserve,” stated Acting Social Security Commissioner Carolyn Colvin. In order to receive the expedited service, veterans must tell Social Security that they have a VA disability rating of 100 percent permanent and total.
Deciding to leave work to pursue disability is a gut-wrenching choice. In the words of the British punk band, the Clash, “If I go there will be trouble; if I stay there will be double.” Here are a few factors to consider:
How do you feel? Are pain or fatigue making it physically impossible to do your job? Are you able to concentrate well enough? Is working making your health worse? Do you feel that you simply cannot do it? You are the only person who can answer these questions.
What is your doctor’s opinion? It will be important to have your doctor support your decision and be willing to complete the appropriate paperwork. It may be helpful to have a frank discussion with your physician.
How will you live? In order to pursue a claim for Social Security Disability you do not have to stop working completely, but you must be earning less than $1,070 per month gross. Unfortunately, you cannot get your disability claim approved first and then reduce your income below $1,070. It will usually take about six months for a Social Security Disability application to be processed at the initial level. Further appeals can take two years. Can you reduce your expenses sufficiently in the mean time? Can you collect NJ State Disability for 26 weeks? Are you entitled to private short or long term disability benefits?
How will you maintain health insurance? It will be important to continue regular medical treatment, not only for your own well-being, but to prove your case as well. How long will your employer cover you? Can you get coverage through a spouse? Would you be able to get Medicaid through the Board of Social Services?
Are you eligible for a pension? Obviously if you are covered by a pension that requires a certain number of years of service, you will want to meet that requirement if at all possible.
What emotional impact will it have on you? Working provides a social network and satisfaction of making a contribution to society. Staying home can be extremely isolating. How will you fill that void?
Can you take a short leave? Perhaps taking a short leave of absence can answer your questions without jeopardizing your job. Try it out and see if the fit is right.
Speak to a lawyer. Feel free to call and I can explain what you need to prove for a person your age with your conditions. This can help you decide if Social Security Disability is right for you.
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.