2017 return

[artist]

We received notice from IRS that we understated social security income on 1040A for 2017 and subsequently owed 7015 in taxes interest and penalties. Upon reviewing my worksheet from that year, I found that the correct amount ($42,777) had been entered in the SSA-1099 line. but it did not show up on line 14a on the 1040A return.

We have paid the taxes and interest ($5917) on time, but requested a first time penalty abatement ($1098) at the suggestion of one of your face to face advisors. The IRS did not accept our reasons that request. we are left to pay the penalty.

We are wondering what happened between the worksheet entry and the final 1040A whose glitch that was.

Thank you in advance for your assistance,

Ken and Mary Lamers

[VolvoGirl]

Is anything on line 14b?  Could it have shown up on another line instead?  

[Anonymous]

you can file an accuracy claim with TT.  if they miscalculated, they say they will pay the penalties and interest.  

https://ttlc.intuit.com/community/charges-and-fees/help/how-do-i-submit-a-claim-under-the-turbotax-1...

[artist]

There is nothing in line 14b

[cangiojl3]

Right now,  do I owe $7015 in taxes interest and penalties? Was this a problem with the program not showing the $42,777 from the SSA-1099 line to line 14A on the 1040A return.  How much is the penalty? Do I have to pay the penalty abatement $1098 and the $1855 owed on my taxes?

[VolvoGirl]

You have to pay what the IRS says unless you know something they are overlooking.  No there was no problem with Turbo Tax.    Did you enter the SSA-1099.  It's not the "a" line but the "b" for the taxable amount.  Did your SS show up on a different line so the IRS missed it?

Did you have any 1099R?  A common thing they change is the taxable amount of any 1099R for pension, 401K or IRA distributions or conversions on 1040.  And if you get Social Security and they increase some other income it will make more of your SS taxable. 

[cangiojl3]

I had several 1099 I received, one was a 1099R from Air Products (Fidelity) for $17,174, one was a 1099R from my wife's pension for $30,011, another was a 1099R from Fidelity for $15,000 and a W2 for $109,074 which gave us a total of $172,120 on form 1040 line 7.  The last was a 1099R for $27,000 which was on line 15a IRA distributions. Could this be causing some of the problems? When I add line 7 to 22I come out with the amount of $134,740.  This was my total income for 2017.

[cangiojl3]

I do not receive social security, and will not until August 2020.

[VolvoGirl]

But a couple posts up you said you had 42,777 from Social Security SSA-1099?

Did any of the IRA shows up as taxable on line 15b?

@dmertz  can you help?

[VolvoGirl]

I can't add up your amounts.  Line 7 should only be the W2 income.  The 1099Rs should be on line 16a and 16b for pensions and 401K.  Unless you got them for disability retirement with code 3 in box 7.

What are the codes in box 7 on the 1099Rs?