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darichard
New Member

Which version of turbotax should be used for social security disability lump sum payment for several years

 
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Coleen3
Intuit Alumni

Which version of turbotax should be used for social security disability lump sum payment for several years

You can use Deluxe.

When figuring the taxable portion of social security benefits, two options are available for lump-sum benefit payments:

The first option allows the taxpayer to report the whole payment in the year it was received. When the taxpayer chooses this option, complete the Social Security Benefits Worksheet as usual by including the entire lump-sum payment on line 1.

The second option is to treat the payment as received in the earlier year or years. This is done by figuring whether any part of these benefits is taxable, based on the earlier year's income. Any part that is taxable is then added to any taxable benefits for the current year and included on Form 1040, line 20b. The taxpayer can elect this method if it lowers the taxable benefits.

If  you choose the second option, only the current year income will be adjusted. Do not file amended returns for the earlier years.

After you enter your SSA-1099 information, TurboTax will ask if you received a lump-sum Social Security payment. If you want to treat it all as taxable in 2018, just answer No and move on.

Otherwise, answer Yes and follow the onscreen instructions. Your SSA-1099 lump-sum section breaks down the payments into what amount was received for each preceding year. You can only enter one year at a time; when finished, click Add Another Lump Sum if you need to enter benefits received for a different tax year.

You will need information from your returns for the years that the lump sum covers.

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1 Reply
Coleen3
Intuit Alumni

Which version of turbotax should be used for social security disability lump sum payment for several years

You can use Deluxe.

When figuring the taxable portion of social security benefits, two options are available for lump-sum benefit payments:

The first option allows the taxpayer to report the whole payment in the year it was received. When the taxpayer chooses this option, complete the Social Security Benefits Worksheet as usual by including the entire lump-sum payment on line 1.

The second option is to treat the payment as received in the earlier year or years. This is done by figuring whether any part of these benefits is taxable, based on the earlier year's income. Any part that is taxable is then added to any taxable benefits for the current year and included on Form 1040, line 20b. The taxpayer can elect this method if it lowers the taxable benefits.

If  you choose the second option, only the current year income will be adjusted. Do not file amended returns for the earlier years.

After you enter your SSA-1099 information, TurboTax will ask if you received a lump-sum Social Security payment. If you want to treat it all as taxable in 2018, just answer No and move on.

Otherwise, answer Yes and follow the onscreen instructions. Your SSA-1099 lump-sum section breaks down the payments into what amount was received for each preceding year. You can only enter one year at a time; when finished, click Add Another Lump Sum if you need to enter benefits received for a different tax year.

You will need information from your returns for the years that the lump sum covers.

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