In October of 2022 I filed my 2021 taxes. eFile through the TurboTax service.
Recently, the IRS sent me a letter saying that I owe additional tax of $327.65 plus interest.
In 2021, I received a lump sum Social Security payment of $1,606 for 2020.
to calculate the taxable amount: 85% of $1,606 is $1,365.10.
In 2021, I am in the marginal tax bracket of 24%. 24% of $1,365.10 corresponds to $327.65 of tax.
This extra tax amount of $327.65 is exactly the figure that the IRS came up with.
I went back to TurboTax and checked that I have the lump sum info entered correctly. On the paper copy of the Form 1040-SR, TurboTax has added the characters "LSE" to the left of the legend for line "6a".
Before I start claiming there is a bug in TurboTax 2021 that has cost me IRS interest, can anyone tell me if I did anything wrong in entering the Social Security info?
To say this another way, it looks as though TurboTax 2021 assessed zero tax on the lump sum; hence the shortfall that the IRS sent the letter about.
