AJ
Level 6
This widget could not be displayed.

Retirement tax questions

The amount shown in Block 5 of a SSA-1099 will be negative when you pay back more Social Security than you receive during the year.  I understand that this is the case and that the amount shown in Block 5 is correct.  Unfortunately the tax rules are not what many might think.  Please see IRS Pub 915 for a detailed explanation (page 15 in the 2017 edition). You should not try to produce a negative income for this on the front of Form 1040.  Instead, the negative income should normally be claimed as an itemized deduction on Schedule A.  If less than $3000, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Claim it on Schedule A (Form 1040), line 23.  If you are not itemizing, then there is no benefit.  If the amount is over $3000, there is a possible credit process that is a bit more complex to use.  See Pub 915 for the detailed description of the credit process that will end up of Form 1040, Line 73 with the notation I.R.C. 1341.