social security miscalulation on my 2018 turbotax

[BILLSCHUTT]

The IRS sent me a letter March 4th. 2019 that You miscalculated my tax refund. You stated I would get @2,267 refund. The IRS said I would (and did) get $5,261 refund. This was due to due to a miscalculation on my social security taxes. 

Taxes paid $7,835

Tax owed   $2,574

Refund due $5,261

Your calculation adjusted gross income $76,159 taxable income on line 7

IRS adjusted gross income calculation   $51,235  taxable income on line 7

Your calculation Taxable income line 10 was $49,559

IRS calculation Taxable income line 10 was $24,635

I want to make sure this is done correctly this year before I use Turbotax for 2019 taxes.

[NCperson]

did you correctly input all your documents and forms last year?  is there a $24924 item that maybe you entered twice????? suggest going back and reviewing all your W-2's  etc from last year to understand if you did something incorrect.  

it is quite unlikely there is a bug in  TT - otherwise millions of people would experience the same issue

[dmertz]

As NCperson said, It seems likely that you entered some extraneous amount of income, but due to the way the amount on Form 1040 line 5b is determined there's a good chance that the extraneous amount was not exactly $24,924.  The extraneous entry could be as little as $13,472 if it's an item other than Social Security income or as much as $29,322 if the extraneous entry was Social Security income.

Note that the IRS refers to as a "calculation error" any discrepancy they detect between what your tax return shows and what they independently calculate based on the information forms sent directly to them by the payers of your income.  It generally does not mean that TurboTax made an actual calculation error.

[Critter · Accepted solution]

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[Kessler47]

I am seeing the same problem on my 2019 taxes. The Turbotax Social Security Benefits Worksheet Line 3 is $52,424. Adding the amounts on 1040SR Lines 1 ($0.00), 2a ($0.00), 2b ($2,807), 3b ($674), 4b ($21,685), and Schedule 1 Line 1 ($0.00) is $25,166 on my adding machine. We have a discrepancy of $27,285. Please explain.  

[BillM223]

I am wondering if any of the following situations applies to you. If so, in this case, it may mean that the worksheet is populated with numbers but nor actually used because another worksheet is called for.

The IRS Instructions for form 1040 say this:

"Use the Social Security Benefits Worksheet in these instructions to see if any of your benefits are taxable.

Exception. Do not use the Social Security Benefits Worksheet in these instructions if any of the following applies.

•You made contributions to a traditional IRA for 2019 and you or your spouse were covered by a retirement plan at work or through self-employment. Instead, use the worksheets in Pub. 590-A to see if any of your social security benefits are taxable and to figure your IRA deduction.

•You repaid any benefits in 2019 and your total repayments (box 4) were more than your total benefits for 2019 (box 3). None of your benefits are taxable for 2019. Also, if your total repayments in 2019 exceed your total benefits received in 2019 by more than $3,000, you may be able to take an itemized deduction or a credit for part of the excess repayments if they were for benefits you included in income in an earlier year. For more details, see Pub. 915.

•You file Form 2555, 4563, or 8815, or you exclude employer-provided adoption benefits or income from sources within Puerto Rico. Instead, use the worksheet in Pub. 915."

[Bben99]

OK, so why doesn't turbo deluxe recognize I need the 590 appendix and change worksheets. Using the 590 by hand reduces my taxable by 15,000. The income and SS match mine, the worksheet sequence is different from turbo,age and status all correct.

[jbroder994]

I received the same email.  Did turbotax make good on the guarantee?

[SweetieJean]

TT guarantees that its math calculations are correct.  However, it is not responsible if you made a data entry error, or forgot to claim some income.  (Those are the usual reasons that the IRS adjusts the taxable part of your Social Security income, since the taxable percent of it is based upon  your other income).