Excess social security tax issue - Got a bill from IRS for approx 14k...

[thembu_1999]

said that 13,500 in excess tax was stated on 2014 return...did I put this value in?(I dont think so) or TT auto calculates?...its on line 71.

[SteamTrain]

Well...TTX puts it on line 71, but it is "based on" the entries you made into the tax return itself.

...if ONE person has W-2 forms from multiple employers, the total of the W-2 box 4 $$ amounts can exceed the yearly maximum SS that the Feds collect on your paychecks.....then the excess is refunded to you on line 71.

BUT that number can be wrong  (and TTX cannot know if it is wrong)...IF;

1)  You accidentally entered the same W-2 form, twice (or more), such that the box 4 total was exceeded.  IF you've done that, you should check line 7 of your 2014 Form 1040 to see if the $$ amount is double, or triple (or more) of box 1 for your entered 2014 W-2 forms  (can be a bit higher for a few reasons, but not full multiples of your W-2 box 1 totals)

or, more commonly

2) You are married, and you accidentally entered all the W-2 forms as belonging to yourself, or all belonging to the spouse.....TurboTax does prompt you to select which spouse the W-2 belongs to, and even shows a table of W-2 forms for you to confirm that the W-2 is assigned to the correct spouse, but that doesn't mean that people don't occasionally forge ahead without looking carefully at them.

So you need to re-check all your 2014 tax return data and see whether #1 or #2 applies to your situation.  (Download a new copy of your 2014 tax file PDF and look at the supporting W-2 forms.).

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Also, if you have been filing MFJ for a number of years, and ever switched the order of which spouse is listed first on the tax return, then that alone can cause problems if you re-use the empty W-2 forms that transfer from the prior year.  If you have ever done that, then next year you should delete all the empty W-2 forms from the prior year and re-enter them from scratch.....and re-check your 2015 data files too in case it happened again

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That large a refund would be highly unusual, and should-have prompted you to be suspicious and ask a lot of questions before actually filing your tax return.   Water under the bridge....

[thembu_1999]

I didnt get a refund of that large amount...I only got a lil over 3k this year...

[VolvoGirl]

Yes, you should double check line 71 on your 2015 return to see if it happened again.  And then next year for 2016 you should either not transfer from 2015 or delete all the W2s and re-enter them from scratch.

[thembu_1999]

..I meant for the 2014 year I got a lil over 3k...Is there a way I can find what I entered into turbo tax...my line 13 states 81,913..doesnt this represent my total amount of income?..

[VolvoGirl]

Line 13 of what?  It's not your income but how you entered the ss withholding from box 4 on your W2.  Are you married?  You entered some of the W2s under the wrong spouse so it looked like 1 person paid in too much SS withholding.  

If you (either one spouse, but not both together) had more than one employer and the total of box 4 on all your 2014 W2s for Social Security is more than $7,254.00 (for each person)  you get the excess back on your tax return. Check 1040 line 71 for it. If only one employer took out more than $7,254.00 you have to get the difference back from that employer and get a corrected W2 form.  
 
If you filed a joint return and both spouses have W2s you have to enter each W2 under the right name (not the ssn) or it will look like all the W2s belong to only 1 person and too much social security tax was paid for that 1 person.   

And by assigning both W2s to the same person the program wouldn't know a W2 is missing from the spouse. It just would think they are both for you.

If you used the Online version you would need to be able to open your return in the Desktop program to check it.  If you look at your W-2 s in the Desktop program, in Form mode, you'll see a line at the very top where the box is checked to show who you chose as the owner of the W-2. That's where the mistake lies. If you choose the wrong person last year it will transfer and will continue to be wrong. See this screen shot…..
<a rel="nofollow" target="_blank" href="http://screencast.com/t/t5iECwAJOpAC">http://screencast.com/t/t5iECwAJOpAC</a>

And for 2015 either don't transfer from 2014 or delete and re-enter all the W2s carefully next year to stop it from continuing.  Pay attention to which spouse you assign the W2.

[thembu_1999]

80,837(line 7) and 1076(line 17) are on my form as income... I was a 5% owner of company that year

[thembu_1999]

no ...not married.. I was reading from the 1040

[thembu_1999]

@VolvoGirl  ....its line 22(1040) states 81,913

[thembu_1999]

...I checked the 2015 return...it does not have an amount in line 71..

[SteamTrain]

On the face of things, None of those (lines 7, 17 or 22) would cause line 71 to be so high.

Perhaps an usually high $$ amount on lines 57 or 58 might do it, but it would seem that line 12 or 17 of the form 1040 would have to be much higher.

or......A mis-entry of some of the other data from whatever form you used to enter the line 17 $$  (I'm not knowledgeable to know what form is used for your 5% ownership....and if it has SS withholding on it)

[VolvoGirl]

Did you have more than 1 W2?  From different employers?  You must have entered box 4 wrong on 1 or more of them.  Add up all the W2 box 4, what do you get?

[thembu_1999]

After looking and discussing allday with TT as well as the advice given
" it appears that one W-2 box 12 entries were erroneously marked as code A (Uncollected social security or RRTA tax on tips), and code B (Uncollected medicare tax on tips). These errors caused you additional tax liability on Form 1040 line 62, code UT as well as additional payment from line 71 as cited by IRS."    Its late now but I will hit it again in morning..and hopefully this is the issue..likely is.  Bad thing is I cant find my original 2014 w2...still looking.  Hope my old job gives me a copy asap. will let cha know  if irs is forgiving of the issue.

[VolvoGirl]

I was just going to say that.  Box 12 can cause that if you entered code A.  Was it actually typed code A on your W2?  Don't confuse the box number/letter with the code.  The boxes are labeled 12a - 12d, etc.  then there is a separate Code letter.