It’s that time of year again.
No, we are not talking about spring, although the increased temperatures to come are a nice reprieve from the cold, hard winter, but the time of year we are talking about is tax season. This week, April 15 is the deadline for Americans to turn in their 2014 tax returns to the Internal Revenue Service (IRS), a deadline no want wants to miss considering the IRS is definitely a government agency you don’t want to play games with.
Those in the workforce know all too well about the taxes they pay to the state and federal government. They receive a reminder every time that paycheck stub arrives. Luckily, workers in America don’t often have to calculate their own state and federal taxes, which is something your employer does and sends your tax obligation directly to the government, but what if that was not the case?
Those who receive Social Security disability payments may not be aware that this income potentially comes with a tax liability. These disabled workers are earning far less in disability payments than they were when working, but may still have to pay taxes on this income.
For a single tax filer on Social Security disability with total income over $25,000 and joint filers with income over $32,000, paying taxes on this income is a realty. Most of these Social Security disability recipients are not aware of this until they receive a tax bill from the IRS, which is an unpleasant surprise considering many of these people are already living on fixed incomes.
It’s time that Social Security disability recipients should not longer have to pay taxes on this income. Does it make sense for someone who pays taxes on income they receive because they are unable to work and make fulltime income? Private disability payments and many retirement payments are tax free, but not Social Security disability.
Instead of trying to get tax dollars from people who are living many times close to or below the poverty level, maybe the government should be focusing on retrieving tax dollars from those who can more afford it.
To learn more about the pos and cons of taxing disability payments click here.
