This is more of an unhappy taxation situation (hey, that rhymes)than a question. I am retired military and have been on a SS disability for a few years and cannot figure out why they want to consider my retired income when figuring my tax on the disability. Confused, you bet. When they approved my disability, they advised me that my military service (20 yrs) was not used in determining my disability monthly payment. That I understood, "but", come tax time, my retired income is included (not excluded)for determining how much of my disability payment is taxed. I talked to the local IRS and they said more or less, 'you don't have to like it, it's the law'. I told them I felt that I was being penalized by the inclusion of my retired income along with my wifes to determine my disability taxation. They said, try filing separate. Well, I checked into that, and it doesnt't make any difference when you use their worksheets. (There are three worksheets) Earlier today I tried again both ways, and came up with the same figure, because the last sentence says: Multiply line 4 (amount of disability payment) by .85. That's great, you get jerked anound 30 or more minutes, filling in all the pertinent data, and it all come down to using the original amount and multiplying by .85. It was a total waste as you can see, if I use only my income or combine with my wife's and file jointly, the amount I end up using is the same! If you take an IRA deduction there is another worksheet for that, which I filled out as well. Help me, help me, help me!s
I don't think you have a case. It sounds like the same rule for taxation of regular SS benefits. If your income is above a certain level your regular SS is taxed too.
<< I am retired military and have been on a SS disability for a few years and cannot figure out why they want to consider my retired income when figuring my tax on the disability. Confused, you bet. >>Me too. I'm not sure I really understand your issue.Social Security disability benefits are taxable in the same manner as Social Security retirement benefits. If that's your only income, you're not going to pay any tax, but if you have enough other income, you're going to pay tax on half or possibly 85% of your SS benefits. As IRS told you, that's the law.The reason for all the complicated worksheets is the complicated law and the fact that IRS has to allow for all contingencies, not just your situation. Come to think of it, I'm not sure I'd like them to know me so well that they could design a worksheet just for me.TMF ExROPhil Marti
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