Help calculating federal income tax withholding for disability benefits

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

I'm looking for help to figure out federal withholding for the rest of 2021. My 2021 financial outlook is fairly different. I'm disabled and receive private disability benefits now.

2020 included:

W2 (former job): $155k with $32k fed income tax (FIT) withheld
W2 (disability): $47k with $7.5k FIT withheld
1099-DIV - $17.5k total ordinary div/$15.5k qualified div
$39.5k FIT withheld, $7k federal taxes owed
filed married separate
standard deduction

2021 will likely include:
W2 (disability): $113k with $0 FIT withheld (just found out they stopped withholding federal from my disability checks in Dec '20 for some reason)
1099-INTS and DIV will be similar in 2021 compared to last year, ie $17.5k total ordinary div/$15.5k qualified div
filing single
standard deduction

Update: I tried using the IRS tax withholding calculator. It doesn't take into account my specific dividend payments but that aside, it says based on 0 fed withholding in my checks so far this year, if I don't make a change to withholding, I'll owe $17,415 in FIT.

The calc recommends I have $2,177 withheld from each paycheck. I'm paid monthly, and the Jan/Feb/Mar/April checks have been issued. For the remaining 8 checks, should I have $3450 withheld for federal then?

Thanks
Last edited by Aguilar on Wed Apr 07, 2021 11:45 am, edited 3 times in total.
MrJedi
Posts: 1066
Joined: Wed May 06, 2020 11:42 am

Re: Help calculating federal income tax withholding for disability benefits

Post by MrJedi »

If you can accurately estimate your 2021 taxable income and tax credits, then you can calculate the amount of tax liability you will have for 2021. More info is needed if you are looking for step by step numbers (filing status, deductions, credits, etc.)

Then you would withhold an amount to try and match your tax liability or at least enough to meet one of the safe harbors if you are ok with having tax due on the return.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

MrJedi wrote: Wed Apr 07, 2021 11:38 am If you can accurately estimate your 2021 taxable income and tax credits, then you can calculate the amount of tax liability you will have for 2021. More info is needed if you are looking for step by step numbers (filing status, deductions, credits, etc.)

Then you would withhold an amount to try and match your tax liability or at least enough to meet one of the safe harbors if you are ok with having tax due on the return.
Thanks, I updated the original post. Does what I added make sense?
MrJedi
Posts: 1066
Joined: Wed May 06, 2020 11:42 am

Re: Help calculating federal income tax withholding for disability benefits

Post by MrJedi »

Aguilar wrote: Wed Apr 07, 2021 11:40 am
MrJedi wrote: Wed Apr 07, 2021 11:38 am If you can accurately estimate your 2021 taxable income and tax credits, then you can calculate the amount of tax liability you will have for 2021. More info is needed if you are looking for step by step numbers (filing status, deductions, credits, etc.)

Then you would withhold an amount to try and match your tax liability or at least enough to meet one of the safe harbors if you are ok with having tax due on the return.
Thanks, I updated the original post. Does what I added make sense?
$2177 seems to already take into account there are 8 paychecks left (17,415/8).

You will also need to take into account other income like your dividends like you mentioned for additional tax liability. You need to know your tax brackets to estimate the amount of tax these add.
Katietsu
Posts: 5273
Joined: Sun Sep 22, 2013 1:48 am

Re: Help calculating federal income tax withholding for disability benefits

Post by Katietsu »

I strongly recommend using TaxCaster for someone like you. I like the smartphone app but you can also use it in a web browser. Here is the link

https://turbotax.intuit.com/tax-tools/c ... taxcaster/


Put in your information like marital status and birthdate. Put the W-2 amount and dividend amount when asked. Put in $0 for withholding.

At the end you will be shown an amount owed. Divide the amount owed by the number of disability checks left for the year. Your answer will be the amount you want taken out of each check. The alternative would be to divide the amount owed by 4 and make estimated tax payments instead of withholding. Your preference.

Do you also need to be concerned about state income tax?
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

MrJedi wrote: Wed Apr 07, 2021 11:45 am
Aguilar wrote: Wed Apr 07, 2021 11:40 am
MrJedi wrote: Wed Apr 07, 2021 11:38 am If you can accurately estimate your 2021 taxable income and tax credits, then you can calculate the amount of tax liability you will have for 2021. More info is needed if you are looking for step by step numbers (filing status, deductions, credits, etc.)

Then you would withhold an amount to try and match your tax liability or at least enough to meet one of the safe harbors if you are ok with having tax due on the return.
Thanks, I updated the original post. Does what I added make sense?
$2177 seems to already take into account there are 8 paychecks left (17,415/8).

You will also need to take into account other income like your dividends like you mentioned for additional tax liability. You need to know your tax brackets to estimate the amount of tax these add.
good catch.

I'm going to assume $17.5k total ordinary div/$15.5k qualified div in 2021. I'll be in the 24% bracket. So that's an addtl $4200.

total expected income is $113k + $17.5k = $130,500
$118k income after standard deduction

Income tax expected to owe:
bracket: 10% ($9950) = $995
bracket: 12% ($9951-40525) = $3669
bracket: 22% ($40526-86375) = $10090
bracket: 24% ($86376-118000) = $7590
Total income tax expected to owe: $22340

divided by 8 paychecks left = $2793 FIT to withhold per check

Does that make sense?
User avatar
FiveK
Posts: 12009
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by FiveK »

Aguilar wrote: Wed Apr 07, 2021 12:26 pm I'm going to assume $17.5k total ordinary div/$15.5k qualified div in 2021. I'll be in the 24% bracket. So that's an addtl $4200.

total expected income is $113k + $17.5k = $130,500
$118k income after standard deduction
Qualified dividends are taxed at a lower rate so $20,934 would be the federal tax on that income (based on the 2021 personal finance toolbox).

$20,934/8 = $2617/mo.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

FiveK wrote: Wed Apr 07, 2021 2:33 pm
Aguilar wrote: Wed Apr 07, 2021 12:26 pm I'm going to assume $17.5k total ordinary div/$15.5k qualified div in 2021. I'll be in the 24% bracket. So that's an addtl $4200.

total expected income is $113k + $17.5k = $130,500
$118k income after standard deduction
Qualified dividends are taxed at a lower rate so $20,934 would be the federal tax on that income (based on the 2021 personal finance toolbox).

$20,934/8 = $2617/mo.
Thanks, I'll elect to withhold $2617 from the rest of my disability checks for the year.
User avatar
Kenkat
Posts: 7558
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: Help calculating federal income tax withholding for disability benefits

Post by Kenkat »

Ignore if I am stating something that you already know, but if your disability payments are from a private policy that you paid for with after tax dollars, the payments are not taxable. If it is employer paid disability coverage, they are taxable.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

OP here. I'd planned to elect to withhold $2617 per check from the rest of my 8 disability checks for the year, but I just found out my insurer is aiming to deny claim, and now I'm in a rough spot. I can't assume I'll get more benefit checks in 2021 beyond 1-2 more (TBD).

Can I still make 2021 estimated tax payments even though I didn't elect to in TaxAct when I did my 2020 taxes? Can I just go to https://directpay.irs.gov/directpay/ and make a payment?

Since the fate of my disability benefit is in flux, it's hard to say what my 2021 income will be, but I was thinking I'd stay on the safe side and assume I'll get the checks through the rest of the year. Would $5234 in estimated taxes per quarter be the equivalent amount to the $2617 per check x 8 I planned on having withheld?

My math:
$2617withheld for federal income tax x8 =$20936 FIT to be withheld for rest of 2021
20936/4=$5234 per quarter (for estimated tax payments)

I figure if my disability benefit is cut before year end, I could decrease my estimated tax payments for the rest of 2021. Does that make sense?

As for state taxes, I got a small NY state refund in 2020. Am I correct that even if I have NY taxes owed for 2021, because I got a refund in 2020 I wouldn't face penalties? If that's the case, I don't plan on messing with state estimated taxes.
User avatar
FiveK
Posts: 12009
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by FiveK »

Aguilar wrote: Thu Apr 15, 2021 9:38 am Can I still make 2021 estimated tax payments even though I didn't elect to in TaxAct when I did my 2020 taxes? Can I just go to https://directpay.irs.gov/directpay/ and make a payment?
Yes. Click "Make a Payment", select "Estimated Tax", and away you go.
Would $5234 in estimated taxes per quarter be the equivalent amount to the $2617 per check x 8 I planned on having withheld?
Yes, but note The first 2021 estimated tax installment is due April 15, 2021.
I figure if my disability benefit is cut before year end, I could decrease my estimated tax payments for the rest of 2021. Does that make sense?
Yes.
As for state taxes, I got a small NY state refund in 2020. Am I correct that even if I have NY taxes owed for 2021, because I got a refund in 2020 I wouldn't face penalties?
Not necessarily. The previous year comparison will be to the total tax liability, ignoring whatever you withheld.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

FiveK wrote: Thu Apr 15, 2021 10:23 am
Aguilar wrote: Thu Apr 15, 2021 9:38 am Can I still make 2021 estimated tax payments even though I didn't elect to in TaxAct when I did my 2020 taxes? Can I just go to https://directpay.irs.gov/directpay/ and make a payment?
Yes. Click "Make a Payment", select "Estimated Tax", and away you go.
Would $5234 in estimated taxes per quarter be the equivalent amount to the $2617 per check x 8 I planned on having withheld?
Yes, but note The first 2021 estimated tax installment is due April 15, 2021.
I figure if my disability benefit is cut before year end, I could decrease my estimated tax payments for the rest of 2021. Does that make sense?
Yes.
As for state taxes, I got a small NY state refund in 2020. Am I correct that even if I have NY taxes owed for 2021, because I got a refund in 2020 I wouldn't face penalties?
Not necessarily. The previous year comparison will be to the total tax liability, ignoring whatever you withheld.
Thanks, I'll go ahead and make an estimated tax payment today for $5234.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

I have been approved for Social Security Disability, and I have to pay tax on the benefit. It's retroactive so I'm receiving $40k this week and about $3k per month after that. While I'm on long term disability through my former employer, I have to pay the SSDI amount back to the long term disability insurer. It seems I'll be double taxed, because I don't get to keep the SSDI benefit.

Two questions:

1. How should I update my estimated tax payments for the rest of this tax year? I paid $5234 per payment so far, based on the conversation in this thread from earlier this year.

2. Does anyone have experience with SSDI and private long term disability, and the issue of being double taxed?

Thanks
User avatar
FiveK
Posts: 12009
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by FiveK »

Would all the long term disability payments have been taxable? If so, returning those dollar-for-dollar based on SSDI will decrease your taxes, because at most 85% of the SSDI will be taxable. You might not need to change anything.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

FiveK wrote: Tue Sep 14, 2021 1:09 pm Would all the long term disability payments have been taxable? If so, returning those dollar-for-dollar based on SSDI will decrease your taxes, because at most 85% of the SSDI will be taxable. You might not need to change anything.
Can you explain a bit more? I don't understand.

All the LTD is taxable. I have to pay the pretax lump sum I get from SSDI to the ltd insurer.

Wouldn't the ltd insurer need to file a 1099 that allows me to reduce my 2021 taxable income by the lump sum, so I don't pay taxes twice?
User avatar
FiveK
Posts: 12009
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by FiveK »

Aguilar wrote: Tue Sep 14, 2021 9:25 pm All the LTD is taxable. I have to pay the pretax lump sum I get from SSDI to the ltd insurer.

Wouldn't the ltd insurer need to file a 1099 that allows me to reduce my 2021 taxable income by the lump sum, so I don't pay taxes twice?
Yes, exactly. The insurer needs to a file 1099s that show the net amount they paid you: whatever you received from them initially, minus the SSDI repayment.

If some of the repayment offsets money you received in 2020, you may have to file an amended 2020 return.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

FiveK wrote: Tue Sep 14, 2021 10:32 pm
Aguilar wrote: Tue Sep 14, 2021 9:25 pm All the LTD is taxable. I have to pay the pretax lump sum I get from SSDI to the ltd insurer.

Wouldn't the ltd insurer need to file a 1099 that allows me to reduce my 2021 taxable income by the lump sum, so I don't pay taxes twice?
Yes, exactly. The insurer needs to a file 1099s that show the net amount they paid you: whatever you received from them initially, minus the SSDI repayment.

If some of the repayment offsets money you received in 2020, you may have to file an amended 2020 return.
I see.

Half of the lump sum is retroactive pay from 2020. The rest is for 2021.

Are they supposed to issue me an amended 1099 for 2020 and another one for 2021, meaning they have to allocate a portion of the repayment to 2020 and the rest to 2021? And I use the amended 1099 as the basis to file an amended 2020 return, showing my taxable income was $X less, and the IRS pays me back? I've never filed an amended return. I hope it's fairly simple. I use TaxAct.

As for 2021, I could be mistaken but is this the situation?: if the insurer's 1099 accounts for the 2021 portion of the SSDI repayment, then my taxable income will be reduced by that amount, so that's sorted, and I also have to pay tax on the SSDI benefits themselves. SSDI lump sum is issued in 2021 so even though part of the money is for 2020 benefits, I assume SSDI would classify to the IRS that the entire lump sum is for 2021 tax year.
runninginvestor
Posts: 735
Joined: Tue Sep 08, 2020 8:00 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by runninginvestor »

Aguilar wrote: Tue Sep 14, 2021 12:33 pm I have been approved for Social Security Disability, and I have to pay tax on the benefit. It's retroactive so I'm receiving $40k this week and about $3k per month after that. While I'm on long term disability through my former employer, I have to pay the SSDI amount back to the long term disability insurer. It seems I'll be double taxed, because I don't get to keep the SSDI benefit.

Two questions:

1. How should I update my estimated tax payments for the rest of this tax year? I paid $5234 per payment so far, based on the conversation in this thread from earlier this year.

2. Does anyone have experience with SSDI and private long term disability, and the issue of being double taxed?

Thanks
https://www.irs.gov/taxtopics/tc306

"The law allows the IRS to waive the penalty if:

You didn't make a required payment because of a casualty event, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or
You retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.
For more information, refer to the Instructions for Form 2210.
"

You may not have to worry about your estimated tax payments this year. It appears that if you become disabled, you won't get hit with the penalty.

And that web page it has instructions for the form for further reading about how to go about this and if it applies:
https://www.irs.gov/pub/irs-pdf/i2210.pdf

For taxation, I withhold a % from SSDI and a flat amount from the LTD carrier. I make estimated state tax payments since I can't withhold for those.
User avatar
FiveK
Posts: 12009
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by FiveK »

Aguilar wrote: Wed Sep 15, 2021 9:17 am
FiveK wrote: Tue Sep 14, 2021 10:32 pm
Aguilar wrote: Tue Sep 14, 2021 9:25 pm All the LTD is taxable. I have to pay the pretax lump sum I get from SSDI to the ltd insurer.

Wouldn't the ltd insurer need to file a 1099 that allows me to reduce my 2021 taxable income by the lump sum, so I don't pay taxes twice?
Yes, exactly. The insurer needs to a file 1099s that show the net amount they paid you: whatever you received from them initially, minus the SSDI repayment.

If some of the repayment offsets money you received in 2020, you may have to file an amended 2020 return.
I see.

Half of the lump sum is retroactive pay from 2020. The rest is for 2021.

Are they supposed to issue me an amended 1099 for 2020 and another one for 2021, meaning they have to allocate a portion of the repayment to 2020 and the rest to 2021? And I use the amended 1099 as the basis to file an amended 2020 return, showing my taxable income was $X less, and the IRS pays me back? I've never filed an amended return. I hope it's fairly simple. I use TaxAct.

As for 2021, I could be mistaken but is this the situation?: if the insurer's 1099 accounts for the 2021 portion of the SSDI repayment, then my taxable income will be reduced by that amount, so that's sorted, and I also have to pay tax on the SSDI benefits themselves. SSDI lump sum is issued in 2021 so even though part of the money is for 2020 benefits, I assume SSDI would classify to the IRS that the entire lump sum is for 2021 tax year.
I don't know how any 2020 effect is supposed to work - nor, more to the point, what the insurer will actually do. Probably worth a call to them so you can plan ahead.

Your expectation for 2021 looks correct, but again a call to the insurer seems worthwhile.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

FiveK wrote: Wed Sep 15, 2021 11:00 am
Aguilar wrote: Wed Sep 15, 2021 9:17 am
FiveK wrote: Tue Sep 14, 2021 10:32 pm
Aguilar wrote: Tue Sep 14, 2021 9:25 pm All the LTD is taxable. I have to pay the pretax lump sum I get from SSDI to the ltd insurer.

Wouldn't the ltd insurer need to file a 1099 that allows me to reduce my 2021 taxable income by the lump sum, so I don't pay taxes twice?
Yes, exactly. The insurer needs to a file 1099s that show the net amount they paid you: whatever you received from them initially, minus the SSDI repayment.

If some of the repayment offsets money you received in 2020, you may have to file an amended 2020 return.
I see.

Half of the lump sum is retroactive pay from 2020. The rest is for 2021.

Are they supposed to issue me an amended 1099 for 2020 and another one for 2021, meaning they have to allocate a portion of the repayment to 2020 and the rest to 2021? And I use the amended 1099 as the basis to file an amended 2020 return, showing my taxable income was $X less, and the IRS pays me back? I've never filed an amended return. I hope it's fairly simple. I use TaxAct.

As for 2021, I could be mistaken but is this the situation?: if the insurer's 1099 accounts for the 2021 portion of the SSDI repayment, then my taxable income will be reduced by that amount, so that's sorted, and I also have to pay tax on the SSDI benefits themselves. SSDI lump sum is issued in 2021 so even though part of the money is for 2020 benefits, I assume SSDI would classify to the IRS that the entire lump sum is for 2021 tax year.
I don't know how any 2020 effect is supposed to work - nor, more to the point, what the insurer will actually do. Probably worth a call to them so you can plan ahead.

Your expectation for 2021 looks correct, but again a call to the insurer seems worthwhile.
This is what LTD said. They are asking for about $37k back out of the $40k lump sum I got from SSDI.

"Assuming you reimburse us the $36,972.40 during 2021, you will receive a reimbursement letter from the Tax Dept in February 2022 detailing the amount of the reimbursement that was applied to the 2021 W-2 and the steps to follow to claim the 2020 portion as a deduction or credit when filing your 2021 tax return."

Sounds like this letter will enable me to ensure I don't pay double tax federal on the $37k? When the agent says letter I imagine she means 1099.

I'm in NYC where we also pay state and city tax. Will the information from the LTD insurer effectively adjust my state/city tax liability for 2020 and 2021 so I'm not paying double state/city tax, too? I asked the LTD provider and they deferred to the IRS.

Side note, I read that LTD can't demand back any Cost of Living Adjustment money from SSDI. Maybe the $3k I get to keep ($40k-37k) is COLA, not sure.
User avatar
FiveK
Posts: 12009
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by FiveK »

Aguilar wrote: Wed Sep 15, 2021 12:30 pm This is what LTD said. They are asking for about $37k back out of the $40k lump sum I got from SSDI.

"Assuming you reimburse us the $36,972.40 during 2021, you will receive a reimbursement letter from the Tax Dept in February 2022 detailing the amount of the reimbursement that was applied to the 2021 W-2 and the steps to follow to claim the 2020 portion as a deduction or credit when filing your 2021 tax return."

Sounds like this letter will enable me to ensure I don't pay double tax federal on the $37k? When the agent says letter I imagine she means 1099.
Probably means a letter explaining what you have to do with whatever (W-2 or 1099) forms they send. Perhaps something similar to My husband had to repay all of the money from his long-term disability insurance when he received retroactive SSI benefits. Do I have to enter that W-2?.
I'm in NYC where we also pay state and city tax. Will the information from the LTD insurer effectively adjust my state/city tax liability for 2020 and 2021 so I'm not paying double state/city tax, too? I asked the LTD provider and they deferred to the IRS.
Seems reasonable, but I'm not familiar with how reasonable or unreasonable NYS/NYC tax laws are.
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

FiveK wrote: Wed Sep 15, 2021 2:08 pm
Aguilar wrote: Wed Sep 15, 2021 12:30 pm This is what LTD said. They are asking for about $37k back out of the $40k lump sum I got from SSDI.

"Assuming you reimburse us the $36,972.40 during 2021, you will receive a reimbursement letter from the Tax Dept in February 2022 detailing the amount of the reimbursement that was applied to the 2021 W-2 and the steps to follow to claim the 2020 portion as a deduction or credit when filing your 2021 tax return."

Sounds like this letter will enable me to ensure I don't pay double tax federal on the $37k? When the agent says letter I imagine she means 1099.
Probably means a letter explaining what you have to do with whatever (W-2 or 1099) forms they send. Perhaps something similar to My husband had to repay all of the money from his long-term disability insurance when he received retroactive SSI benefits. Do I have to enter that W-2?.
I'm in NYC where we also pay state and city tax. Will the information from the LTD insurer effectively adjust my state/city tax liability for 2020 and 2021 so I'm not paying double state/city tax, too? I asked the LTD provider and they deferred to the IRS.
Seems reasonable, but I'm not familiar with how reasonable or unreasonable NYS/NYC tax laws are.
Just read that NY state doesn't tax SSDI benefits so I think I'm good. If NY state doesn't tax it, NYC shouldn't.
Gill
Posts: 7623
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Help calculating federal income tax withholding for disability benefits

Post by Gill »

I haven't read the entire thread, but are you sure the disability benefits are taxable? You probably know they are not if you were the one who paid the premiums.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
Topic Author
Aguilar
Posts: 101
Joined: Fri Jan 24, 2020 11:01 pm

Re: Help calculating federal income tax withholding for disability benefits

Post by Aguilar »

Gill wrote: Fri Sep 17, 2021 3:21 pm I haven't read the entire thread, but are you sure the disability benefits are taxable? You probably know they are not if you were the one who paid the premiums.
Gill
Yeah, both my long term disability and SSDI are taxable at the fed level.
Gill
Posts: 7623
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Help calculating federal income tax withholding for disability benefits

Post by Gill »

Aguilar wrote: Sat Sep 18, 2021 11:52 am
Gill wrote: Fri Sep 17, 2021 3:21 pm I haven't read the entire thread, but are you sure the disability benefits are taxable? You probably know they are not if you were the one who paid the premiums.
Gill
Yeah, both my long term disability and SSDI are taxable at the fed level.
Who paid the premiums for the long term disability?
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
Post Reply