IRS highlights for people with a disability – Know about SSDI and Other Benefits

Staying informed about IRS updates is crucial, especially for those receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). The IRS has recently announced several important highlights for individuals with disabilities, detailing key publications and new updates. Here’s a comprehensive guide to the latest tax information relevant to you.

Key IRS Publications

The IRS provides various publications to help individuals with disabilities understand their tax obligations and benefits:

Publication 907

This is the primary publication to keep up with the latest tax information for individuals with disabilities. It covers essential topics such as:

• ABLE Accounts: The maximum contribution limit to an ABLE account has increased to $17,000. Additionally, some eligible ABLE accounts may allow you to contribute a limited additional amount.
• Taxable and Nontaxable Income: Guidelines on what income must be reported and what can be excluded.

Other Relevant Publications

• Publication 524: Credit for the Elderly or the Disabled. This publication explains how to claim the tax credit if you qualify.
• Publication 525: Taxable and Nontaxable Income. Provides a comprehensive list of various types of income and their taxability.

Taxability

Understanding whether your disability benefits are taxable is crucial. Here’s what you need to know:

SSDI Benefits

Generally, if you only receive SSDI benefits, you are unlikely to owe taxes on them. However, if you have additional sources of income, part of your SSDI benefits may become taxable. Here are the thresholds to keep in mind:

• $25,000: If you are single, a qualifying surviving spouse, or head of household.
• $25,000: If you are married, filing separately, and lived apart from your spouse for the entire year.
• $32,000: If you are married and filing jointly.
• $0: If you are married, filing separately, and lived with your spouse at any time during the year.

SSI Benefits

SSI benefits are not taxable. This means that if your only source of income is SSI, you do not have to worry about paying taxes on these benefits.

Important Updates

• ABLE Accounts: With the contribution limit for ABLE accounts raised to $17,000, eligible individuals can take advantage of this to save more money tax-free.
• Additional Contributions: Some ABLE accounts allow for limited additional contributions beyond the standard limit, providing more flexibility for those with disabilities.

Compliance Tips

• Track Your Income: Keep a detailed record of all income sources to ensure you understand your tax obligations.
• Consult IRS Publications: Regularly review relevant IRS publications (907, 524, 525) to stay informed about changes and opportunities.
• Professional Advice: Consider consulting with a tax professional to navigate complex tax situations, especially if you have multiple income sources.

Staying informed about tax regulations and updates is essential for individuals with disabilities. By knowing the key IRS publications and knowing the taxability of your benefits, you can better manage your financial obligations and take advantage of available benefits. The IRS provides valuable resources to help you navigate your tax responsibilities, ensuring you remain compliant and informed.

FAQs