If you want to enter the lump sum payments individually for each year, you will need to access the prior year returns for the information. If you did not keep them, you can get transcripts or even prior year returns from the IRS. The taxable potion of any social security payment will be on Line 5 b of your prior year 1040s.
A free IRS return transcript via mail or online is the
quickest option and has most of the information from your return. Go to the
IRS transcript site and
follow the online instructions.
To
get a transcript via mail (which most people can do) To
get a transcript via mail you’ll need:
This
option will allow you to:
- Get your transcript in 5 to
10 calendar days to the address on file for you with the IRS (if you’ve
moved recently, you might not be able to get a transcript via mail).
- Choose different transcript types (for the one with your
tax return info, select “Tax return transcript”).
Lump Sum
When figuring the taxable
portion of social security benefits, two options are available for lump-sum
benefit payments:
The first
option allows the taxpayer
to report the
whole payment in the year it was received.
When the taxpayer chooses this option, complete the Social Security Benefits
Worksheet as usual by including the entire lump-sum payment on line 1.
The second option is
to treat the
payment as received in the earlier year or years. This is done by figuring whether any part of these benefits is
taxable, based on the earlier year's income. Any part that is taxable is then
added to any taxable benefits for the current year and included on Form 1040,
line 20b. The taxpayer can elect this method if it lowers the taxable benefits.
If you choose the second
option, only the current year income will be adjusted. Do not file amended
returns for the earlier years.
After you enter your SSA-1099
information, TurboTax will ask if you received a lump-sum Social Security
payment. If you want to treat it all as taxable in 2018, just
answer No and move on.
Otherwise,
answer Yes and follow the onscreen instructions. Your SSA-1099
lump-sum section breaks down the payments into what amount was received for
each preceding year. You can only enter one year at a time; when finished,
click Add Another Lump Sum if you need to enter benefits received for
a different tax year.
You will need information from
your returns for the years that the lump sum covers.
