I received a letter stating that in 2015, I reported an amount in "Excess Social Security and RRT tax withheld, line 71", which the IRS is now disputing, resulting in a payback with interest due of almost $3K. Does this sound right? Wouldn't the TurobTax software have caught this if it was really an error?
Excess Social Security can happen when
you are married and assign both spouse's W2 to the same person, it will look
like all the W2s belong to only 1 person and too much social security tax was
paid for that 1 person. You need to check 1040 line 71 for
it. And by assigning both W2s to the same person the program
wouldn't know a W2 is missing from the spouse. It just would think they are
both for you.
For 2015 the max SS is $7,347 per person.
For 2014 the max SS is $7,254 per person.
So if you (either one spouse, but not both together) had more than one employer
and the total of box 4 on all the W2s ( for Social Security is more than the
max (for each person) you get the excess back on your tax
return. But not if both spouse's W2s went over.
OR It could be the case that you entered a code wrong for a Box 12
amount on your W-2. If you used code A instead of the correct code,
that error may also have produced excess social security.
Did you file 2016? Better check line 71 and see if it transferred
over wrong and happened again. You might be getting a bill for
2016 also if the error happened again. And for 2017 either don't transfer from 2016 or delete and
re-enter all the W2s carefully next year to stop it from
continuing. Pay attention to which spouse you assign the W2.
See the screenshot of the 2015 warning screen that you may have missed ...
Did you file a joint return on which you reported all of the income under only one spouse's name?
Excess Social Security can happen when
you are married and assign both spouse's W2 to the same person, it will look
like all the W2s belong to only 1 person and too much social security tax was
paid for that 1 person. You need to check 1040 line 71 for
it. And by assigning both W2s to the same person the program
wouldn't know a W2 is missing from the spouse. It just would think they are
both for you.
For 2015 the max SS is $7,347 per person.
For 2014 the max SS is $7,254 per person.
So if you (either one spouse, but not both together) had more than one employer
and the total of box 4 on all the W2s ( for Social Security is more than the
max (for each person) you get the excess back on your tax
return. But not if both spouse's W2s went over.
OR It could be the case that you entered a code wrong for a Box 12
amount on your W-2. If you used code A instead of the correct code,
that error may also have produced excess social security.
Did you file 2016? Better check line 71 and see if it transferred
over wrong and happened again. You might be getting a bill for
2016 also if the error happened again. And for 2017 either don't transfer from 2016 or delete and
re-enter all the W2s carefully next year to stop it from
continuing. Pay attention to which spouse you assign the W2.
See the screenshot of the 2015 warning screen that you may have missed ...