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Generally, the payments from an insurance company, received after an auto accident is not considered taxable income. The money you receive is typically a reimbursement for damages or expenses and is not a gain and is not considered income for tax purposes. However, there are a few exceptions: Property Damage: Payments for repairing or replacing your vehicle are not taxable. This is because the money is simply restoring your property to its original value, not giving you a profit. Medical Expenses: Compensation for medical bills and other related expenses from an injury is not taxable. This includes amounts for physical pain and suffering that resulted from a physical injury. Lost Wages: If part of your settlement is specifically for lost wages, that portion is taxable. This is because you would have paid taxes on that income if you had earned it from work. Punitive Damages: Any money received as punitive damages, which are meant to punish the at-fault party, is always taxable. If the settlement is for property damages or medical expenses, you may not receive any form or need to report it on your taxes.  On the other hand,  if you do receive a Form 1099-MISC or Form 1099-NEC for a taxable portion of the settlement (like lost wages or punitive damages), you must report it. How to Report in TurboTax Online: Go to the "Income & Expenses" section. Find the "Other Common Income" or "Less Common Income" category. Select "Miscellaneous Income, 1099-A, 1099-C" and follow the prompts. You'll enter the information from your 1099 form, and the software will guide you through questions to determine the taxable amount. For more information see:  Taxable or Nontaxable Income? Are Legal Settlements Taxable? Is Canceled, Forgiven, or Discharged Debt Taxable?   Please feel free to reach out with any additional questions Thank you for joining us today and have an amazing rest of your day!   **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer.”

You may be eligible to use the new senior deduction to reduce your taxable income if you fall under the income threshold.  You can read a good overview of everything here. Some other items that may help you are the raising of the State and Local tax cap to $40,000 if you earn up to $500,000, deduction for auto loan interest for certain vehicles. We have this Free Tax Reform Calculator that you can create a custom scenario in. If you are using TurboTax Online, you can start your return for free, and then depending on the time of year you file and your items of income and expense, the pricing will vary.   Hope this helps! Cindy

Let's say if I add an extra $3,000 to the 2021 Tax return while Amending it, will the Turbo Tax software make the adjustment(s) if any to reflect on the 2022 Tax year from Amending 2021 year?     Also, how does it work,  I used to have a Landlord that even if I was late with my rent, I do not recall him ever charging me any late fees, but in the Lease or and however it was, it was mentioned that if you don't pay by a certain date or and however it was informed me of, about late fee(s), however it was.  Does that fall under CANCELLED DEBT in the IRS' eyes, or is Cancelled Debt only if, someone ACTUALLY BILLS you or and LOANS you a certain amount of money, property or and if any otherwise of debt, and if you don't pay any or all of it back to the debtor and the debtor tells you that you don't have to pay them all or any of the debt, then that is Cancelled Debt?  Of course there are exceptions to this depending on the situation(s), such as Gifts and other subjects.

You have not shared any information about the amount of your income or the sources of your income, so we cannot say whether you will be able to use the Free Edition or if you will need a higher version of the software.   The Free Edition can only be used for very simple returns that only require a Form 1040.   If your return requires the use of any extra forms or schedules, you have to upgrade to a paid version.

Up to 85% of your Social Security benefits can be taxable on your federal tax return.  There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits.  When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable.     What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2021 it was  $18,960.  For 2022 it was  $19,560  —  for 2023 $21,240)  For 2024, $22,320.  For 2025 it will be $23,400   After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare.  If you work as an independent contractor then you will pay self-employment tax for Social Security and Medicare.   To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2024 Form 1040   https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable   You need to file a federal return if half your Social Security plus your other income is   Single or Head of Household      $25,000 Married Filing Jointly                  $32,000 Married Filing Separately            $0       Remember that the taxable amount of your SS is on line 6b (at least as the Form 1040 is now) and  your standard deduction and that "extra"$6000 (per spouse if you file joint) is deducted later---farther down on the tax form, so you will end up paying tax on less of your income.

I believe you are asking how your income impacts the taxability of your Social Security benefits.   The amount of your Social Security that is taxable depends on your income.  Income includes wages, interest, dividends, pension payments, and taxable distributions from traditional 401(k)s and IRAs (less adjustments), as well as nontaxable interest and half of Social Security benefits received.   Depending on your income, Social Security can be taxed as follows:  If you file as an individual: Up to $25,000: No tax $25,000–$34,000: Up to 50% of your benefits may be taxed. More than $34,000: Up to 85% of your benefits may be taxed. If you file a joint return: Up to $32,000: No tax $32,000–$44,000: Up to 50% of your benefits may be taxed. More than $44,000: Up to 85% of your benefits may be taxed. Remember that you will have your standard or itemized deduction to reduce your taxable income and from 2025 to 2028 an additional Senior deduction of $6,000 (or $12,000 if married filing joint) if you are 65 or over on last day of the tax year, have a valid Social Security  Number and your modified adjusted gross income is $75,000 or under ($150,000 or under if married filing joint).     **Please say "Thanks" by clicking the thumbs up icon in a post ***Mark the post that answers your question by clicking on the "Mark as Best Answer"

Under the One Big Beautiful Bill, the married filing jointly would still be the best option for your scenario, based on the information provided,  to maximize the overtime deduction benefits. How the Overtime Deduction Works: Married Filing Jointly: You can deduct up to $25,000 of qualified overtime pay. The deduction begins to phase out when your combined modified adjusted gross income (MAGI) exceeds $300,000. Single: As a single filer, you could only deduct up to $12,500 of qualified overtime pay, and the deduction would begin to phase out at a MAGI of $150,000. In your specific situation, your combined income would be $235,000 ($160k + $75k). Filing jointly keeps you well below the $300,000 MAGI phase-out threshold, allowing you to claim the full $25,000 deduction. If you were to file as single, the higher-earning spouse's income of $160,000 would put them immediately into the phase-out range for the deduction, significantly reducing or eliminating their benefit. Also worth noting: MAGI Phase-Out: The deduction is reduced by $100 for every $1,000 your MAGI exceeds the threshold. Qualified Overtime: The deduction applies specifically to the premium portion of overtime pay (the "half" in "time-and-a-half"). Filing Status Requirement: To claim the full overtime deduction, married couples must file a joint return, hence the deduction is not allowed for the married filing separate status. For more detailed information see:  One Big Beautiful Bill Act of 2025 provisions Taxes 2025-2026: One Big Beautiful Bill Tax Law Changes and How That Impacts You   Please feel free to reach out with any additional questions . Thank you for joining us today and have an amazing rest of your day! **Say "Thanks" by clicking the thumb icon in a post **Mark the post that answers your question by clicking on "Mark as Best Answer.”

This is a very complex situation and while we do have some tools available to assist, we do not have a dedicated IRMAA calculator.  We do offer a custom scenario input on our Free Tax Reform Calculator.   If you purchase the desktop version of TurboTax, it does include a "What-If" worksheet tool.  For a Roth conversion, you could incrementally increase the amount of your converted IRA and observe how it impacts your tax bracket and total tax owed.  Many financial services companies offer planning calculators, so you might check with the company who administers your IRA.   Hope this helps! Cindy  

If one of you is a W-2 employee and one of you is self-employed, then you are trying to compare apples and oranges when you ask which filing status is better for the OT tax.    The self-employed spouse will still prepare a Schedule C for business expenses and pay self-employment tax for Social Security and Medicare.  You do not get "overtime" pay if you are self-employed.    The W-2 employee who gets overtime can get some credit for the overtime and not pay tax on all of it.       If you are legally married at the end of 2025 your filing choices are married filing jointly or married filing separately when you prepare your 2025 return next year.   Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $31,500 (+ $1600 for each spouse 65 or older)  for 2025. You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.    If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return.    Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)    If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice since with online, you get one return per fee.     https://turbotax.intuit.com/tax-tips/marriage/should-you-and-your-spouse-file-taxes-jointly-or-separately/L7gyjnqyM?srsltid=AfmBOopGqCNexowW0pYgvsf7ycIkrx4VjO_63UXv6vSnfu3UEGQiKQTh   https://ttlc.intuit.com/turbotax-support/en-us/help-article/income/getting-married-mean-taxes/L2RgmagpE_US_en_US?uid=m69on7t0  

Under the new tax law, married couples who choose the Married Filing Separately status are not eligible to claim the "No Tax on Overtime" deduction. This deduction, part of the One Big Beautiful Bill Act (OBBBA), allows eligible workers to reduce their federal income tax liability by excluding a portion of their qualified overtime pay from their taxable income.  The new provision for overtime introduces a deduction for qualified overtime income up to $12,500 for tax years 2025 through 2028 and phases out for income above $300,000 for Married Filing Jointly. 

For tax years 2025 - 2028, taxpayers may be allowed to deduct up to $12,500 ($25,000 if filing jointly) for qualified overtime pay. The deduction phases out for taxpayers with modified adjusted gross income (MAGI) greater than $150,000 ($300,000 for joint filers). The phaseout is a reduction of $100 of the deduction for every $1,000 of income over the $150,000/300,000 threshold. This will be a "below the line" deduction, meaning it will not reduce your adjusted gross income that is used for many other tax calculations. The amount that will be deductible is the amount of pay that exceeds your regular rate of pay for time worked in excess of 40 hours in one week. For most individuals, it will be the "half" in "time-and-a-half". To be eligible for the deduction, taxpayers must have a Social Security number (ITINs are excluded), and if married, must file a joint return. Employers will need to report the annual amount of overtime compensation received at the end of the year on an information return. (W-2, 1099, etc.)

You would likely be eligible to take the full $6k senior deduction on your 2025 tax return if the following are true: you are age 65 or older by December 31, 2025 your modified adjusted gross income is below the $75k threshold - you said it's $60k, so you should be fine there you include your social security number on your tax return Thanks for your question!