Social security taxable income mistake

[Lars6]

Yes, @LaneyN sounds exactly like the same situation, an incorrect response to the ambiguous question about living in certain countries. Again, TT needs to fix that. 

[bartolettisf]

I had this same issue. Turbo Tax calculated 47% as taxable social security amount when further research indicates that this should have been 85%. Interestingly, our 2023 tax return in Turbo Tax shows 85%. I spent all afternoon trying to find someone at Turbo Tax to help with this. Now, I’ve decided that the IRS is right, so will pay per their notice.

[bartolettisf]

As you have probably learned by now, the guarantee is only for penalties and interest (and maybe a refund of the cost of the program) 

[DawnC]

You have to have marked NO on the following screen.   If you marked Yes, the income would have shown as non-taxable.  

[Lars6]

@bartolettisf If you're able to read the thread, you'll see that you most likely answered the question about whether you lived in a foreign country incorrectly--- as I did and multiple TT users did too. The wording on the question is quite ambiguous. The result is that less of your SS income is reported as income and that's wrong. A TT Expert posted a screen shot of the foreign-country question and the proper way to answer it. 

[Extaxman]

It appears TurboTax failed to properly calculate the taxable portion of my SSA income as well.  I went from refund status to receiving a CP11 stating I owe additional tax.  TurboTax a.i. chat is no help and I am overseas at the moment; so my only recourse is to pay the amount on the notice before the due date and possibly work on a1040x later if I disagree with the IRS calculation.  Which is probably correct. The TurboTax accuracy guarantee only covers penalties and interest, it appears, not aggravation.

[m_szilagyi]

I am dealing with this! I received an IRS notice CP11 stating that the taxable Social Security benefits were changed because they were calculated incorrectly. I went from a rare refund in a year when the standard deduction went UP, to more than $2500 owed. This has caused concern for future returns and questioning the liability of Turbotax in this instance. I spoke with a Turbotax technician who states that they calculate this similarly every year but it seems as though the software dropped the ball! This just sucks! Are we supposed to review how the software is done now?????

[VolvoGirl]

There is a new question this year asking if you lived in a foreign place. People have been answering it wrong or skipping it. Go back through the Social Security entries and check, check for each spouse if married.

Some Posts
4/26/25 This user missed the question for the spouse
https://ttlc.intuit.com/community/retirement/discussion/re-why-would-tt-miscalculate-and-underreport...

4/23/25
https://ttlc.intuit.com/community/after-you-file/discussion/re-irs-changed-refund/01/3674438#M798051

[m_szilagyi]

Based on my conversations with a Turbotax technician today and information on the IRS website

https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable

you guys should double check the software. I have gone from an expected refund to owing over $2000. Not officially a penalty but it certainly feels like it and you guys need to accept accountability.

[m_szilagyi]

I don't remember those questions. Since the IRS is the US taxes, why would you even ask it that way unless it refers to additional income? Until changed, Social Security in the United States is taxable income.

[bartolettisf]

Really annoying. Like you I had virtually the same return last year with no problem on the tax calculation. They claim I neglected to enter “no” when asked if I live overseas but I don't believe the system asked me, and even if it had, that should trigger an error warning. 

[binghamrs]

The same thing happened to me (just received the IRS notice today).  Instead of getting a refund, I have to pay some tax.  As far as the TurboTax "100% Guarantee", that only covers any penalty.  We are still liable for any tax.  Pretty much a useless guarantee - who is going to bother filing some paperwork to recoup 58 cents?  There is definitely a coding error in TurboTax software for 2024.

[gwedemeyer]

Me Too!

IRS recalculated Social Security tax due and sent me a bill for ~$7.000 plus penalty and interest. I filed claim with Turbo Tax for inaccurate calculations and was denied because "Social Security benefits showing spouse marked as living in a foreign country." Screenshot of the question dialogue lists foreign countries Canada, Egypt, Germany, Ireland, Israel, Italy (and you are Italian citizen), Romania,  United Kingdom.

Neither box is checked for me but "yes" box is checked for spouse. 

They then recommend that I amend my state return also.

TT argues that I made the error by checking the box, but I never saw that dialogue and neither I nor my spouse have lived in a foreign country ever. Why would I check neither box for myself and "yes" for my spouse? 

I believe others have had the same issue with TT Social Security tax calculation and traced it to the same box being checked who also had no recollection of having seen the question.

I'm disappointed with TT response. Fairly persuasive argument for using accountant rather than TT.

[gwedemeyer]

So far I count 28 messages on this thread with exactly the same complaint about inaccurate calculations by Turbo Tax. If 28 smart people and unknown others who haven't taken the trouble to write in make the same "error" I think the vote is against Turbo Tax and they should admit that there is some glitch in that question with strange default to checking the "yes" box for one or the other spouse and they should admit (and fix) the error and make good on their accuracy guarantee.

I work in an industry where errors can have fatal consequences and I have often argued that when multiple smart people make the same error the problem lies with systems and procedures, not with individual workers.