Social Security

[moosepastor]

I received a lump payment from social security that we received in 2016 for the years of 2013 and 2014. How do I input this information and is there a way to deduct the lawyers fees?

[IreneS]

You will be able to enter the lump sum Social Security distribution after entering any distributions for 2016.  To enter Social Security income please follow these steps:

1. Click on Federal Taxes >  Wages & Income.
2. In the Retirement Plans and Social Security section, click on the Start/Revisit box next to Social Security (SSA-1099, RRB-1099)   [See Screenshot #1, below.]
3. On the next screen, Social Security Benefits, mark the Yes box and click Continue.  [Screenshot #2]
4. On the screen Tell Us About the Benefits You Received, mark the box for Social Security benefits (Form SSA-1099).  [Screenshot #3]
5. A set of boxes will appear for you to enter the Social Security benefits for you and your wife.  [Screenshot #4]
6. Click Continue when done.
7. The next screen will ask if you received any lump-sum payments.  Mark the appropriate button and click Continue.  [Screenshot #5]

Legal fees to collect taxable Social Security benefits are deductible.  [For example, if only 50% of your benefits are taxable, you can deduct 50% of the legal fees.]  To enter the expenses:

1. Click on Federal Taxes > Deductions & Credits.
2. In the Other Deductions and Credits section, click on the Start/Revisit box next to Legal Fees.