My total amount should be reduced by 50% for tax filing purposes and the Inuit software is not doing that--it is including the whole amount and nowhere does it show it is reducing it. My income is less than Intuit calculates.
Help as I elected to erase and redo the tax forms last night after a representative could not fix the issue.
Dependent upon your other income, up to 85% of your social security can become taxable. TurboTax will include the amount of your social security as part of your total income, but that does not mean you are being taxed on it. You have to look at your tax return to determine how much of your social security income is actually being taxed.
Your total Social Security amount will be listed on line 6a, but the amount on line 6b is the amount being taxed.
You can check to be sure that is what is happening by viewing your Tax Summary. Here is how to do that:
You will see below how to figure if you have taxable social security or you can visit IRS.gov and use the Interactive Tax Assistant tool.
Tax Formula. Here’s a quick way to find out if a taxpayer must pay taxes on their Social Security benefits: Add one-half of the Social Security income to all other income, including tax-exempt interest. Then compare that amount to the base amount for their filing status. If the total is more than the base amount, some of their benefits may be taxable.
Base Amounts. The three base amounts are:
$25,000 – if taxpayers are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from their spouse for all of the tax year
$35,000 – if they are married filing jointly
$0 – if they are married filing separately and lived with their spouse at any time during the year
And you are mixing apples and oranges.
In the background, on a "Social Security Benefits Worksheet", turbotax takes half of your gross SS benefits, Plus your other income to determine how much of your SS will be taxed (up to 85%)
That doesn't mean that 50% of SS income is being included in income (nor the taxable amount)....the 50% thing is only a background calculation to determine how much of SS will end up being taxed on your main 1040 tax form.
My total income is under $25,000 with social security and a part-time job. I file as single since I am not married.
Thank you all for your answers, I see that I could have been more explicit in my question.
Check your actual 1040 return line 6a and 6b, not any of the review or summary screens. Those show the whole amount as income.
Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:
Married Filing Jointly: $32,000
Single or head of household: $25,000
Married Filing Separately: 0
You should not use the worksheet on the back of the SSA-1099. It can be complicated to figure out even though it looks simple. Turbo Tax figures it all out for you.
When you enter 1/2 of your ss on line B it is not being subtracted from anything. It is being ADDED to ALL your other income to see if any of the ss will be taxable to you.
To see the Social Security Benefits Calculation Worksheet in Turbo Tax Online version you would have to save your return with all the worksheets to your computer. Or if you are using the Desktop CD/Download Software you can switch to Forms Mode (click Forms in the upper right) and click on SS in the list on the right side.