Taxable Portion of Social Security Retirement Benefits

[fanboy]

Hi,

The following IRS web page states that I should add one-half of their social security retirement benefits to my "other income."  Is this "other income" gross income or AGI?  This is the IRS page I'm referring to.
https://www.irs.gov/newsroom/dont-forget-social-security-benefits-may-be-taxable

I only earned $15,755 for 2022 and after my standard deduction, the taxable amount is $2,805.18.  So I'm wondering, do I add one-half of my social security benefits to the $15,755 or the $2,805.18?

Thanks in advance!

~ Frank

[Mike9241 · Accepted solution]

in Turbotax you enter the amount from box 5 of the SSA-1099 that you will receive. Turbotax will calculate the taxable portion.

if you are preparing your return manually, complete the worksheet in the 1040 instructions on page 32

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf 

it doesn't seem like any of the exceptions listed below to using the worksheet would apply to you but just in case

Exception. Do not use the Social Security Benefits Worksheet in these instructions if any of the following applies.
• You made contributions to a traditional IRA for 2022 and you or your spouse were covered by a retirement
plan at work or through self-employment. Instead, use the worksheets in Pub. 590-A to see if any of your social security benefits are taxable and to figure your IRA deduction.
• You repaid any benefits in 2022 and your total repayments (box 4) were more than your total benefits for 2022 (box 3). None of your benefits are taxable for 2022. Also, if your total repayments in 2022 exceed your total benefits received in 2022 by more than $3,000, you may be able to take an itemized deduction or a credit for part of the excess repayments if they were for benefits you included in income in an earlier year.
For more details, see Pub. 915. 
• You file Form 2555, 4563, or 8815, or you exclude employer-provided adoption benefits or income from sources within Puerto Rico. Instead, use the worksheet in Pub. 915.

https://www.irs.gov/forms-pubs/about-publication-915 

[xmasbaby0]

If you are using TurboTax to prepare your tax return you do not need to do any of that math yourself.  Forget about using that worksheet on the Social Security statement.  All you need to do is enter your SSA1099 into the software exactly as it appears and let the software do the calculations for you.  If you have other income, enter that income as well, in the appropriate area--whether it is W-2 income, investment income, etc. etc.

You will receive your SSA1099 from Social Security sometime in January.

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

[fanboy]

Thank you. I started to complete my return, along with the amount I expect to see on my SSA 1099 form.  Amazingly, the "manual" way would've had me paying about $208 to the IRS but now that I'm using TurboTax, I see I may be owed (or credited) just over $3,000.

I've been using TT for years, but this is the first year I'm filing as a semi-retired part-time self-employed working who also received social security payments, so I was just wanting to get a little jump on the taxes.

I'm good for now though, and I'll wait patiently for my 1099's from SAA and my 1099-K for my other online income.

Thanks again!

Frank

[tapaculo]

I have always done what you recommend, namely enter into Turbo Tax the information on our SSA-1099's, and let the software decide what to do with that data. But I just received a letter from the IRS on our 2021 return, contesting what TT entered for cell 6B, the taxable amount of the total benefits that appear (correctly) in cell 6A. To respond, I need to find out, how does Turbo Tax determine the taxable amount? I did check (not that I expected this to be what was done), it is not a subtraction of the other items on the 1099, the Medicare amount and the income tax withheld.)

[BillM223]

If you ever get a letter form the IRS or a state revenue department, please visit our TurboTax Audit Support Center. They will explain the letter to you and suggest how to respond to it.

[VolvoGirl]

The IRS may have increased some other income which would make more of your SS taxable.

To see the Social Security Benefits Calculation Worksheet  in Turbo Tax Online version you would have to save your return with all the worksheets to your computer.   Or if you are using the Desktop CD/Download Software you can switch to Forms Mode (click Forms in the upper right) and click on SS in the list on the left side.

Is your Social Security taxable?

https://ttlc.intuit.com/community/income/help/is-my-social-security-income-taxable/00/25600

IRS Pub. 915 on Social Security.  There is a blank worksheet on page 16

https://www.irs.gov/pub/irs-pdf/p915.pdf

And right you don't get to subtract Medicare and withholding .  

Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

[LHH_Lee]

Thank you.  I was reviewing my forms before filing and had the same question about the difference between my SSA benefit amount shown in box 5 of the SSA-1099 and the taxable amount shown in TurboTax.  After reading your comment about 'Up to 85% of Social Security becomes taxable ..."  -- a simple multiplication confirmed that to be the difference.  One less thing to lose sleep over.