Combined Income

• Combined income calculations determine whether you owe federal income taxes on your Social Security disability income. Combined income is half of your Social Security disability benefits plus all of your nontaxable income added to your adjusted gross income. This figure must exceed $25,000 for you to owe taxes on your Social Security benefits in 2011. You may use the worksheet in the Internal Revenue Service Publication 915 for Social Security and Equivalent Railroad Retirement Benefits to calculate combined income.
  
  

First Tier Taxation

• If you are filing as a single individual, a combined income between $25,000 and $34,000 requires taxation of 50 percent of Social Security disability payments. If you are married filing jointly, the IRS taxes 50 percent of Social Security disability payments starting at $32,000. The first tier for married couples filing jointly ends at $44,000. If you are married filing separately and lived with your spouse in the taxable year, you will probably owe income taxes on your Social Security disability payments. The IRS instructions ask that you add "D" to the right of "benefits" on Line 20a of Form 1040 or Line 14a of Form 1040A if you are married but filing separately.
  
  

Second Tier Taxation

• In 2011, combined income in excess of $34,000 as a single filer or $44,000 as a joint filer triggers taxation of 85 percent of Social Security disability benefits. Social Security recipients do not have 100 percent of Social Security benefits taxed in 2011. If your Social Security disability payments are taxable, you cannot use Form 1040EZ to file your federal income taxes.
  
  

SSI and SSDI Disability Benefits

• Supplemental Security Income, also administered by the Social Security Administration, provides income to disabled individuals but differs from Social Security disability in several ways. Where Social Security disability bases benefits on work history, SSI provides benefits to individuals with no work history. The IRS does not tax SSI benefits. You may qualify for Social Security disability in an amount below the SSI disability benefit of $674 in 2011, and if that occurs, you may receive both benefits. If you receive $500 in Social Security disability as a result of your work history, SSI benefits may pay $174. If your payments are from both sources, use only the Social Security disability figures for calculation of combined income.