Hello! I received a lump sum for social security disability, and then had to pay a portion of that to my employer. I received about 30,000 and repaid 20,000. I received the lump sum in 2023 and repaid it in 2024 to my employer. I tried adding this to the repayment over 3,000 deduction area, but this is just adjusting my standard/itemized deduction and not social security taxable amount. This is only adjusting my income by 8,000 and not the full 20,000. Is there a different way to add this? I am using turbo tax software. Thank you!
It depends. The amount of taxable social security will not change since it is based on your total income. For the 'claim of right' you can use the credit or the deduction. The credit may be more advantageous than the deduction however you must use TurboTax Desktop and you need a copy of last year's tax return.
If you use the deduction be sure you are answering the right question and entering the amount in the right screen.
If you do not have enough other itemized deductions this may not help as a deduction as much as a credit might help.
You have access to all forms when you choose to print your return in TurboTax Online/Mobile. However you are required to pay before printing, but do not have to file until you are ready.
If you are using TurboTax Desktop you can switch to Forms and review all forms and worksheets.