QUESTION
What amount of disability income should be withheld for Federal and State Taxes?
Asked on Mar 15th, 2014 on Taxation - Missouri
More details to this question:
I am about to start receiving long term disability and need to know how much I should have withheld for Federal and State taxes. They said I could give them a percentage or a flat dollar amount. My monthly payment will be $371. Thanks.
2 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If your monthly payment is $371, this represents income of only $4100 a year. To determine the appropriate amount of tax, you need to estimate your total income for the year. For example, if your total income will be $100,000 then you will be in the 28% bracket and you'll need to withhold $1150 to cover your tax liability.
Answered on Mar 17th, 2014 at 4:40 PM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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You should consult with a tax attorney. Many companies paying out benefits such as you will be receiving would routinely withhold something in the area of 20%. This would be quite a bit on the size benefit you will be receiving. As I said, you should consult with a tax attorney or CPA.
Answered on Mar 17th, 2014 at 11:57 AM