Question about social security.

Discussion in 'Fibromyalgia Main Forum' started by cjcookie, Jun 14, 2006.

  1. cjcookie

    cjcookie New Member

    My lawyer says I should be set to get approved in August. I will get a substantial amount of back pay. Is this all taxed? I'm glad to get the back pay but I owe most of it to my parents who have helped me out in the past 2+ years when I had no income. I'm afraid this will mess up my son's financial aid for college.

    The good news is I will get medicare right away. Yippee!
  2. suzetal

    suzetal New Member

    Unless you are low income.

    SSD does not take out the taxes when you get your big settlement.I paid my taxes when I filed at the end of the year.

    So you might want to stash some away.If you look at last years taxes you can see what percentage you paid on your income and put that percentage away till you file your taxes.

    sue
  3. BlueSky555

    BlueSky555 New Member

    why would it be considered "gift" money back to parents rather than "loan"?

    BlueSky555


    I think I may have read it wrong???[This Message was Edited on 06/14/2006]
  4. suzetal

    suzetal New Member

    They taxed my back pay.I had to report it.

    Must be cause my DH income .We filed joint.My accountant said whether we filed joint or I filed by myself I still had to pay taxes on it.

    Sue
  5. justlooking

    justlooking New Member

    All SSDI payments are taxable if your income is above a certain dollar amount. If you are married and file with your spouse, their income is taken into consideration.

    You can go to the SSA website and go to the tax section and it will tell you the rules for taxing and the income levels and taxable percentages.

    I received 3 years back pay and had to pay taxes (a lot) on 2 of the years because of my husbands income. One of the 3 years my husband had no income and that year we did not have to pay taxes on my SSDI.

    As for monthly payments going forward, you can have them take out the taxes from your monthly check so you don't get stuck with a large payment at the end of the year.

    Please go to SSA.gov for the correct information pertaining to your income!

    Sincerely
    JL
  6. NyroFan

    NyroFan New Member

    cjcookie:

    I never paid tax on my back payment. I called IRS and they told me how to divide the money on one form and list by year.

    It sounds complicated, but IRS reps can help you. They are actually very good at knowing what to do.

    good luck.

    nyrofan
  7. victoria

    victoria New Member

    Paying them back is not considered giving them a gift. This is assuming you have a loan agreement on paper and it was not a gift from them (which it doesn't sound like) - all IRS looks for is an agreement to pay back.

    We borrowed money from my in-laws in the past and just signed a formal agreement to pay them back according to a few different terms - monthly payback a few times as well as one lump sum another time.

    This is totally legal and no different than borrowing money from a bank --- as long as you pay interest.

    If interest is "too low" or zero, tho, it might then be looked at differently and regarded as a 'gift'.

    Just a heads-up ahead of time...

    best,
    Victoria


  8. cjcookie

    cjcookie New Member

    I estimated the amounts and filled out a tax form from this past year. Even though it was over $30,000, it said it wasn't taxable. Of course, the FAFSA form says I have to report it. I think I can fill out special circumstances for that, though.

    thanks


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