The previous posts on this subject do not include examples with screen shots of what to enter in each of the questions for prior year benefits. In this example, Box 3 and Box 5 of my statement says $70,000. Box 4 is None. Then, Box 3 breakdown says I paid $500 in Medicare part B premiums, and $7000 in Attorney Fees. It says the $70,000 includes $27,000 paid in 2024 for 2023 and $14,000 paid in 2024 for 2022.
Please step me through what to enter in each of the boxes for 2023 and 2022 and where I enter the attorney fees.
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After you enter the 1099SSA information, you will continue until you see the question on the Lump Sum payment for a previous year (see below). The attorney fees are included in the 2024 amount.
The following screens will ask:
How much was your lump-sum payment for 2023?
If you had a SSA-1099 for 2023, enter Box 5 amount
Filing Status for 2023
Adjusted Gross Income
Tax Exempt Interest
Taxable Social Security
Adjustments
Then you can add 2022 following the same steps.
Thank you MaryK4. I have no SSA for 2023. Should I enter zero in Box 5?
For "Taxable Social Security benefits in 2023" enter zero there as well?
After I enter these amounts (for 2023 and 2022) the total federal tax due is still $13,000. It made no difference. I was expecting the Federal tax Due to drop. Does it recalculate later? Do I need to look into filing separately instead of jointly? What can I look at to decrease the Tax due? I appreciate your help!
Yes you would enter zero for 2023 Box 5 and Taxable Social Security Benefits.
The $13,000 tax should not change.
Regardless of when the Social Security is distributed, even as a lump-sum payment, it will be taxed in the current year even if the payment includes benefits for earlier years.
To determine if the benefits are taxable, taxpayers should take half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends and capital gains.
Do not file separately
Please see IRS reminds taxpayers their Social Security benefits may be taxable
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