2019 I received SSDI Lump sum for 2017 & 2018
I have read and pretty much understand the following:
While you might have to pay taxes on a small portion of your lump sum payment from Social Security, the IRS does not penalize disability beneficiaries for receiving past-due benefits all in one year. Federal law provides that individuals can apportion past-due benefits to previous years, thus lowering or eliminating the taxable amount of their lump sum per year, without having to file amended tax returns.
Social Security sends beneficiaries a form called the SSA-1099 each year they receive benefits. If you're receiving this form for the first time, it should state in Box 3 the exact amount of your lump sum that was accrued during previous years.
Each year will be listed separately alongside the total amount paid for that year.
My question applies to the following:
"Rather than requiring you to file amended returns for those years, the IRS allows you to handle it all on your current tax return, using prior years' income amounts."
I did my 2019 taxes with TT Premier and entered the SSA-1099 Box 3 information for 2017 & 2018 and I am very surprised at the relatively small amount of taxes I owe.
Did TT automatically use my 2017 & 2018 TT records to determine what I owe for 2019 and did it apportion past-due benefits to previous years, thus lowering or eliminating the taxable amount of their lump sum per year, without having to file amended tax returns?
In short, am I really done and will I be fully paid up for 2017, 2018 & 2019 when I send the money TT says I owe to the IRS?
It seems too easy and taxes owed are 1/6th of what I thought I was going to pay.
Thank you for your time and help
