I just discovered that Americans living in certain foreign countries may exempt their SSA benefits from income tax. How is this done on Turbo ? (entering 0 seems shady

[null668]

Very clear exemption from IRS Pub 915

[ColeenD3]

Please see this answer from KatherineC.

Your taxable social security benefits would be calculated the same as if you were a resident of the US.  US citizens are taxed on their worldwide income.

However, if you live in one of the following countries, your Social Security Benefits are exempt from tax on your Form 1040:

Canada, Egypt, Germany, Ireland, Israel, Italy (if you are also a citizen of Italy), Romania and the United Kingdom.

If you meet the qualifications for your Social Security Benefits to not be taxed, report the Social Security exactly as it appears on your SSA-1099. 

To deduct the taxable amount of your Social Security Benefits you need to:

• On the Wages & Income tab, scroll to Less Common Income and click on Show more
• Click the button beside Miscellaneous Income, 1099-A, 1099-C
• Click the button beside Other Reportable Income
• Click Yes on the "Any Other Taxable Income?" page
• Enter a description (IRS PUB 915 - SS Income Not Taxable) and the amount of Taxable Social Security as a negative number
• Click Continue then Done

•  

[ES Weix]

I just tried this recommendation below on an example to see how this would work. I am living in Israel and just started collecting Social Security so this will be relevant when I file in 2023 for 2022 income. Before adding in any social security income, TT was reporting a $5,069 refund. I added in social security income of $5,000. My refund immediately dropped to $3,922. I then followed the recommendations and added $5,000 as a negative number in the "Other Reportable Income" section. But then instead of the refund jumping back to $5,069, it jumped further to $5,272. So with this solution, it doesn't seem to simply be offsetting calculations. Any recommendations?

[ES Weix]

I have my answer. In the example, I should not have put in $5,000 as the negative number. It should have only been the taxable portion of the $5,000 which in this example was $4,250. Once I changed it to $4,250, the refund reverted to $5,069

[NCperson]

@ES Weix -   remember that adding $5000 of social security income does not mean all $5000 is taxed (the max is 85% of the $5000), so if you added $5000 of social security income but only $4250 is taxed and then you made a misc. adjustment reducing social security by $5,000, then you AGI has decreased, that will increase the refund.

is that the problem? 

[NCperson]

@null668 - our posts crossed - note the instructions:

• Enter a description (IRS PUB 915 - SS Income Not Taxable) and the amount of Taxable Social Security as a negative number

[ES Weix]

I have a few followups on this.

Continuing on the example below, I found that New York State tax got updated. The reason that it got updated was that on NY State Form IT-203, it automatically made a New York State subtraction to Federal Income of $4250. They had already incorporated the negative $4250 in line 16. Therefore, $4250 was subtracted twice. I tried to compensate for this with a New York addition to income of $4250 as follows:

1. Changes to Federal Income
2. Other New York adjustments to federal income --> Other changes (adjustments) to your federal income
3. Enter Any Other Additions
4. I chose Special Accruals as there was no choice of "Other"
5. In Federal, right-click on the cell, fill in reason for Description and close. In NY section, put in 0.

The good news is that the calculations were done correctly. However, the description that I input for the NY addition did not show up on the generated forms so it just appears as a random addition under a section called "Special Accruals" or whatever other choice I would have chosen.

Is there a way to specify an addition with an explanation that is included with what is filed. Or alternatively, is there a way to avoid the social security taxable amount from getting subtracted twice.