i received a letter from IRS about my 2017 tax return that I filed through TurboTax. They indicated that there is a discrepancy in line 71 of the tax filing. I am not exactly sure how that number was arrived at so I need help with the clarification. Can someone please call me at [phone number removed]
EXCESS SOCIAL SECURITY
Look at line 71 of your 2017 tax return. If there is an amount there, then you claimed to have paid excess Social Security. That could happen when you enter all of the W-2 income under only one name on a joint return. The IRS refunds the “excess” Social Security. Now they have matched your W-2’s to the return and they want that money back. Does line 71 show more than $7886? If you did not have more than $7886 withheld on ONE of the spouse's W-2's then that is why you have a problem. Look at your actual W-2 in box 4. What is in box 4?
Check the worksheets from your tax return to see if you entered all of the W-2 income for both spouses under only one of the names on a joint return. That is the most common reason for this problem. Unfortunately, it is user error. As you prepare your return, several screens alert you to it.
You should also check to see if you made this same mistake for your 2018 return. For 2018 is there more than $7960.80 shown on line 72 of your schedule 5? Did you assign the W-2's to each spouse or put it all under only one of your names? You will not see this on the Form 1040--you have to look at your own W-2's and your worksheets. On your 2018 Form 1040, various amounts from schedule 5 will appear on line 17. The amount withheld for SS will be shown on the actual W-2 in box 4. If you made this same mistake for 2018 you need to amend before you get a letter from the IRS about that one, too.
TurboTax does not receive any information from the IRS or your state after your return was filed, so no one at TurboTax knows about a letter you received from the IRS or the state.
(what the letters from the IRS mean)
I GOT A LETTER FROM THE IRS
I AM BEING AUDITED
If you purchased Audit Defense:
TurboTax has a special phone number for help with IRS/state tax letters, which will be easier than going through regular Customer Support. At the page below, click on the blue button that says "Get Help from TurboTax Support". Then it will ask you what tax year is your letter. Then it will ask you what the letter concerns. Then it will show you the phone number during posted business hours.
"Does line 71 show more than $7886? " What xmasbaby0 meant to write was "line 71 shows the amount of Social Security withheld in excess of $7886" (for 2017). Thus, if you had $8,000 withheld for Social Security taxes, the amount on line 71 would be 8,000 - 7,886 or $114.
xmasbaby0 is right that this is a common situation (mis-entering the owner of the W-2). Remember that the IRS gets copies of all W-2s, so if you enter yours incorrectly, the IRS has the correct numbers and can see the problem.
In essence, the IRS counted on their fingers and toes and could not come up with more than $7,886 in Social Security tax withheld for any given taxpayer (I don't know if you are filing married joint or not). So go through the exercise of looking at all your (and spouse's if one) W-2s as well as Schedule SE(s) and see if it adds up to more than $7,886 for any single taxpayer. At the same time, make sure that if both taxpayers have a Schedule C, that the Schedule Cs are owned by the correct taxpayer (like the W-2s).
Note that Schedule SE reports "self-employment" taxes, which are are the sum of the Social Security and Medicare taxes together for a self-employed person. Schedule SE is filed in conjunction with Schedule C by TurboTax.
@BMcCalpin Thank you--I did not explain that amount clearly. Glad you caught it!