One has 12 months to file a request to withdraw their application for social security (at 62 in my case). It is supposed to be as if you turned back the decision and it never occurred. I have two weeks to finalize the paperwork. My question is if I decide to do this it means I must payback all funds paid out to me. How do I handle this on my 2020 tax return? The SS began last May and continued until they accept my request to withdraw application. Further complication is that I voluntarily had tax deducted on monthly payment (which must also be paid back). How do I handle the situation I've described? It will involve both 2020 & 2021 tax returns I assume. To be clear, I have not submitted my 2020 return and take appropriate actions in light of this situation if I know what the appropriate actions are. Trying to think ahead I guess.
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You will have to report the social security income on your 2020 tax return as it was reported to you. On your 2021 tax return, you will enter an adjustment to account for the additional taxes you paid in 2020 as a deduction from your taxes on your 2021 tax return.
Can you supply more specific information regarding your statement, ”On your 2021 tax return, you will enter an adjustment to account for the additional taxes you paid in 2020”. More directly, how to accomplish the ‘adjustment’.
Thank you!
Can you supply more specific information regarding your statement, ”On your 2021 tax return, you will enter an adjustment to account for the additional taxes you paid in 2020”. More directly, how to accomplish the ‘adjustment’.
Thank you.
So she needs to recalculate her 2020 taxes in 2021 "as if" she had NOT received the Social Security income; take the tax liability difference between the 2020 return WITH the SS and the 2020 return calculated WITHOUT the SS.. And use that as the "tax adjustment" amount?
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