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Why is it important to know whether or not my long-term disability is taxable or non taxable? by Patricia Santucci
It is important to know whether your long-term disability benefit is taxable or non taxable because it makes a significant difference with respect to the amount of your benefit. For example, if you earned $40,000 per year (or $3,333 per month) your yearly take home pay will be in or around $31,600. This means that in ordinary circumstances you are living on $2,633.33 per month. Let’s also assume that your disability benefit is equal to 66.67% of your gross monthly salary. Thus, if your benefit is non-taxable the monthly benefit would be $2,223 per month (that is 66.67% of $3,333). If your benefit is taxable, your monthly benefit will be approximately $1,820. That is a big difference in income, and you will need to plan for the decrease in income by re-adjusting some of your expenses. (3)
Patricia Santucci is a personal injury lawyer born and raised in Hamilton, Ontario. She holds several degrees having attended King’s College at the University of Western Ontario, McMaster University, earned a Master of Arts degree at the University of Windsor and an Ontario Teaching Degree from Teacher’s College as well as her Ontario Teaching Certificate. After graduating from the University of Alberta law school she was called to the bar in 2000. You can find Patricia on Google+ and LinkedIn or directly through this website