Your taxable social security benefits would be calculated the same as if you were a resident of the US. US citizens are taxed on their worldwide income.
However, if you live in one of the following countries, your Social Security Benefits are exempt from tax on your Form 1040:
Canada, Egypt, Germany, Ireland, Israel, Italy (if you are also a citizen of Italy), Romania and the United Kingdom.
This information is taken from IRS Publication 915
(See the screenshot below)
If you meet the qualifications for your Social Security Benefits to not be taxed, report the Social Security exactly as it appears on your SSA-1099.
To deduct the taxable amount of your Social Security Benefits you need to:
- On the Wages & Income tab, scroll to Less Common Income and click on Show more
- Click the button beside Miscellaneous Income, 1099-A, 1099-C
- Click the button beside Other Reportable Income
- Click Yes on the "Any Other Taxable Income?" page
- Enter a description (IRS PUB 915 - SS Income Not Taxable) and the amount of Taxable Social Security as a negative number
- Click Continue then Done
To look at the Form 1040 to confirm that amount has been deducted on Line 21 (and to double check the taxable social security amount), please follow the instructions below.
- Please click on Tax Tools in the column on the left side of your Turbo Tax screen.
- Then click on Tools; (See the second screenshot below)
- Then View Tax Summary (See the third screenshot below)
- Click on "Preview my 1040" in the left column. (See the fourth screenshot below)
If you want to confirm the taxable amount of your Social Security Benefits, Click here to access a Social Security Benefits Worksheet. You can work through the calculation to see if you should have taxable social security.
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Edited 4/9/18 | 5:58 am PST - changed content of original answer - some SS not taxable to residents of certain foreign countries]
