Additional Tax paid

[jimbarbg1]

Hello, in 2022 I started receiving social security benefits.  I was told that i didn't have to claim, so on January 3, 2023, I received the dreaded letter form the IRS stating that I owe them $3,375 in additional taxes.  Would/could anyone tell me #1 - can I claim this on my taxes this year and #2 could you tell me where?  I sure don't want to put it in the wrong place and have to pay again. 

Thank You very much

James. 

[DoninGA]

You will have to amend the 2022 tax return you filed to add the Social Security benefits you received in 2022 and reported to you on a Form SSA-1099.

See this TurboTax support FAQ for amending a tax return - https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/amend-change-correct-return-a...

To enter Social Security benefits reported on form SSA-1099

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Retirement Plans and Social Security
On Social Security (SSA-1099, RRB-1099), click the start or update button

[xmasbaby0]

@jimbarbg1  " I was told that i didn't have to claim"

Who told you that?  Someone gave you incorrect advice.   If Social Security is your ONLY income, you do not have to file a tax return, but if you receive Social Security along with other kinds of income, you may need to file, and your SS can become taxable.

You must file a federal return if half your SS or RRTA benefits plus your other income exceeds 

Single, HOH, or qualifying widower  $25,000

Married filing Jointly  $32,000

Married filing Separately $0

 Go to Federal> Wages & Income>>Retirement Plans and Social Security  (SSA1099 and 1099RRB) to enter your SSA1099.

TAX ON SOCIAL SECURITY

Up to 85% of your Social Security benefits can be taxable on your federal tax return.  There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits.  When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable. 

 What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2019 it was $17,640— for 2020 it was $18,240; for 2021 it was  $18,960.  For 2022 it was  $19,560  —  for 2023 $21,240)  For 2024, $22,320.

After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare.  If you work as an independent contractor then you will pay self-employment tax for Social Security and Medicare.

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2023 Form 1040

https://ttlc.intuit.com/questions/1899144-is-my-social-security-income-taxable

https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable

You need to file a federal return if half your Social Security plus your other income is $25,000 when filing single or head of household, or $32,000 when filing married filing jointly, $0 if you are filing married filing separately.

Some additional information:  There are 11 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont  These states offer varying degrees of income exemptions, but two mirror the federal tax schedule: MN and VT.

The tax laws for 2024 will change——for  tax year 2024 Missouri and Nebraska will no longer tax SS

[xmasbaby0]

Oh---and no, you cannot deduct the federal tax you had to pay for 2022 on your 2023 tax return.

 There is a handful of states in which you can deduct federal tax you paid.

Alabama, Iowa. Missouri, Montana, and Oregon.  If you are filing in one of these states watch for the deduction when you prepare your state return.