As a U.S. citizen or resident, you are generally taxed on your worldwide income, regardless of where you live. Therefore, if you're receiving Social Security Disability benefits and are also earning income from working in the Bahamas, both sources of income may be subject to U.S. federal income taxes.
Social Security Disability benefits can be taxable, but it depends on your combined annual income, which includes other taxable sources of income as well. If your combined annual income is above a certain threshold, a portion of your Social Security Disability benefits will be taxable. These thresholds are:
1. $25,000 for single, head of household, qualifying widow(er) with dependent child, or married individuals filing separately who did not live with their spouse during the year.
2. $32,000 for married couples filing jointly.
3. $0 for married individuals filing separately who lived together during the year.
Regarding your income from the Bahamas, as a U.S. citizen or resident, you are subject to taxes on that income. However, you may be eligible for the Foreign Earned Income Exclusion or the Foreign Tax Credit to reduce or eliminate the additional tax liability. The Foreign Earned Income Exclusion allows you to exclude a certain amount of foreign earned income from your U.S. taxable income. The Foreign Tax Credit provides a credit against your U.S. taxes for any foreign income taxes you've paid.
Keep in mind that tax situations can vary, so it's essential to review your specific circumstances and consider discussing your situation with a tax professional to ensure you are compliant with U.S. tax laws.
This is all correct but leaves out some information that the user might like to have. They seem to be asking if their foreign income is included in the SSI calculations. The answer (yes) is implied but not explicitly stated. Also, the income thresholds are addressed, but there is more info that might be helpful since there are different thresholds for a 50% and an 85% taxable amount. If you file a federal tax return as an "individual," and your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. More than $34,000, and up to 85% of your benefits may be taxable. If you file a joint return, and you and your spouse have a combined income that is between $32,000 and $44,000, and you may have to pay income tax on up to 50% of your benefits. More than $44,000, and up to 85 percent of your benefits may be taxable. If you're married and file a separate tax return, you probably will pay taxes on your benefits.
