Wednesday, January 25, 2012

What Do I Need To Know About My Disability Benefits and Taxes in San Francisco

Social Security payments in San Francisco come without any taxes deducted but this does not mean that you do not have to pay taxes on the payments. Just as you pay taxes out of your paycheck from a regular employer, you have to pay taxes from your Social Security Benefits. The only difference between the two is that employers are required to automatically withhold your taxes and the Social Security Administration is not.

The amount of taxes you may have to pay is determined by annual household income.

  • If you file taxes individually and make more than $25,000 a year you will be required to pay taxes on the Social Security benefits you receive.
  • If you file taxes jointly and make more than $32,000 a year, you will be required to pay taxes on the Social Security benefits you receive.

Social Security does not automatically deduct taxes out of your benefit payments the way a typical employer does. If you know that you are going to exceed the amounts listed you need to contact the Social Security Administration Office and ask them to automatically deduct taxes. When requesting to have these federal taxes withheld, you will be asked if you want seven, ten, fifteen, or twenty five percent withheld for tax related reasons.

The Social Security Administration can only withhold federal taxes from your Social Security payments and does not have the authority to withhold any state or local taxes. This is because Social Security is usually issued to those with low income and is based on financial need. If you qualify for Social Security disability benefit payments, it is unlikely that you exceed the income limit for eligibility. It is recommend to contact SSA and to have them automatically withhold taxes if you know that you will exceed the taxable amounts.

Do not neglect to file your Social Security income because you make too much and have to pay taxes on your disability payments. The Internal Revenue Service will contact you and let you know that you owe taxes that you have not paid. Remember to contact the Social Security Administration Office at the end of the year, or beginning of the New Year, to request a form 1099 to report your disability earnings on your taxes. Not reporting these earnings can put you in debt with the Internal Revenue Service, and when that happens, they will garnish your regular income wages and possibly take possession of your assets. They are not allowed to garnish any of your benefit payments.

Disability Group, Inc. was founded on the principles of dignity and respect. We are a national law firm focused exclusively on helping people receive the Social Security Disability benefits they deserve. For more information about Social Security, or to see if you qualify for benefits, visit us at

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